Key Takeaways

• Bitcoin reverses: The world’s largest crypto fell 2.8% to $63,964.6, giving back a bulk of its recent recovery gains.
• Fed the culprit: The central bank held rates but showed a growing number of policymakers considering a 2026 hike — spooking risk assets.
• December hike now priced in: Investors are pricing at least one 25 basis point hike by year-end, per CME FedWatch.
• Warsh signals communication overhaul: The new Fed chair’s plans to revamp how the Fed communicates its rate intentions sparked additional market uncertainty.
• High rates crush crypto appeal: Elevated borrowing costs diminish the attraction of speculative assets versus safer debt instruments.
• Iran MOU signed: The U.S. and Iran remotely signed the framework deal Wednesday evening, paving the way for comprehensive peace talks.
• Nuclear talks central: Iran’s nuclear program will be a key focus of the upcoming 60-day negotiation period.
• Peace deal failed to lift crypto: Risk-on sentiment from the MOU was channeled into AI and chipmaking stocks — not cryptocurrencies.
• AI rotation accelerates: The shift from crypto to fundamentally sound tech stocks has intensified in recent months.
• ETF outflows extend: The persistent institutional exodus from spot Bitcoin ETFs continues to weigh.
• Ether drops 3.6%: To $1,729.19 — underperforming even Bitcoin.
• XRP slides 4.3%: A sharp reversal after recent gains.
• Solana, Cardano, BNB fall 3-5%: Broad altcoin retreat.
• Memecoins hit: Dogecoin fell 3.5%; $TRUMP slid 2.9%.

Bitcoin fell on Thursday, reversing a bulk of recent gains after hawkish signals from the Federal Reserve saw markets ratchet up expectations for an interest rate hike this year.

The signing of a U.S.-Iran peace deal did little to shore up sentiment toward cryptocurrencies, with the sector continuing to vastly lag technology and artificial intelligence stocks.

Bitcoin fell 2.8% to $63,964.6 by 01:31 ET (05:31 GMT).

Bitcoin Pressured by Hawkish Fed Signals

Bitcoin tumbled in overnight trade after the Fed left interest rates steady as expected.

But the central bank meeting showed an increasing number of policymakers considering an interest rate hike later in 2026, amid risks from high inflation.

New Fed Chair Kevin Warsh also signaled an overhaul in how the Fed would communicate its plans for interest rates — sparking additional uncertainty in markets.

Investors were seen pricing in at least one 25 basis point hike by end-2026, CME FedWatch showed.

High rates bode poorly for speculative, risk-driven assets like crypto, given that they diminish the appeal of investing in the sector over safer plays like debt.

U.S. and Iran Sign Framework Peace Deal

A host of reports on Wednesday evening showed the United States and Iran had remotely signed a memorandum of understanding to end their war and reopen key shipping lanes in the Middle East.

The framework deal paves the way for more U.S.-Iran talks toward a lasting, comprehensive peace agreement. Central to the upcoming talks will be Iran’s nuclear program, which the United States has vehemently opposed.

The development sparked a risk-on rally in markets, although investors stuck to AI and chipmaking stocks with sound fundamentals over more speculative plays like metals and crypto.

This trend has picked up steam in recent months, driving extended outflows from crypto — especially in spot exchange-traded funds.

Crypto Price Today: Altcoins Dither With Bitcoin

Broader crypto prices largely retreated in tandem with Bitcoin, taking little support from the U.S.-Iran development.

Ether, the world’s second-largest cryptocurrency, fell 3.6% to $1,729.19, while XRP slid 4.3%.

Solana, Cardano, and BNB fell between 3% and 5%.

Among memecoins, Dogecoin fell 3.5%, while $TRUMP fell 2.9%.