Bitcoin dropped approximately 4% to $64,000 following the Federal Reserve's decision to maintain interest rates at 3.5% to 3.75% in Kevin Warsh's first meeting as Fed chair, with the foremost cryptocurrency trading below the critical $65,000 level. According to AMBCrypto, the hawkish decision came as the Fed cited sticky inflation and noted that half of the Fed's board of governors favored at least one interest rate hike this year, creating expectations of relatively expensive loans that typically dampen risk sentiment. The so-called 'dot plot' showed this hawkish stance, reinforcing the local top for Bitcoin's recent relief bounce and effectively repricing investors' expectations for the cryptocurrency market. As per The New York Times, Warsh's press conference leaned heavily on phrases like 'first principles' and 'alternative frameworks', language that felt more like a philosophy lecture than a rate roadmap. Notably, Warsh was the only FOMC member who did not submit a dot-plot projection, and he announced five new task forces covering inflation, communications, economic data, productivity, and the labor market, with early findings expected in the fall.
The volatility this week has intensified with $452 million worth of positions liquidated in the past 24 hours, with $361 million coming from long positions according to 99Bitcoins data, signaling the market is back in a downtrend. The single largest liquidation order was an ETH/USDT position on Binance worth approximately $9.08 million. Both Bitcoin and Ethereum long and short positions took significant damage, with this kind of two-sided wipeout indicating sharp directional swings with no clear conviction from either bulls or bears. The pattern has been consistent over the past eight months: five FOMC meetings have resulted in five sell-offs, averaging roughly 23% per event. Even when the Fed decision was fully priced in and widely expected, Bitcoin still dropped hard each time, with markets pricing in a 99.6% chance of no rate change today. The uncertainty across the market has caused a slowdown in trading volume, which has dropped to $86 billion over the past 24 hours, down from around $110 billion just a few days ago.
The Fear and Greed Index has dropped to 14/100 from 22/100 on Wednesday, firmly planting investors in 'Extreme Fear' territory according to 99Bitcoins. These figures represent a significant decline from earlier in the week, with the index unable to break out of this reading despite recent price action. The Fear and Greed Index serves as another signal that investors aren't as optimistic as they were earlier in the week, with the majority of the market remaining red on the day. While the initial nomination shock alone wiped roughly $160 billion from the broader crypto market, the sustained decline below $64,000 indicates that market sentiment has deteriorated further, with the $65,000 level where BTC briefly traded during Warsh's Senate confirmation hearing emerging as key psychological support.
Kalshi, a prediction-markets platform, has recently begun preliminary discussions with investment banks about a potential initial public offering (IPO) according to The Information. The company has already held informal talks about an IPO, with Kalshi's annualized revenue surpassing $2 billion, a significant increase from $1 billion reported in March. In May, the platform successfully raised $1 billion in a Series F funding round, bringing its valuation to $22 billion. This round was led by Coatue, with participation from prominent firms including Sequoia Capital, Andreessen Horowitz, IVP, Paradigm, Morgan Stanley, and ARK Invest. According to data from The Block, Kalshi's monthly trading volume reached $16.81 billion in May, up from $14.81 billion in April, while competitor Polymarket reported a trading volume of $7.08 billion last month, down from $9.01 billion in April.
The recent G7 summit statement expressed significant concern regarding North Korea's nuclear and ballistic missile programs, highlighting cryptocurrency theft as part of the broader security threat. While the leaders did not announce specific measures, they left open the possibility of future actions, including tighter screening for exchanges, expanded sanctions, pressure on mixing services, or closer coordination with blockchain analytics firms according to Cointelegraph. This language builds on the G7's position from last year, following the June 2025 summit in Canada where the group's chair urged members to address North Korean cryptocurrency thefts. The latest statement expands the warning to encompass cybercrime more generally, indicating that governments now perceive the issue as larger than just isolated cryptocurrency hacks. This renewed call comes after several significant incidents suspected to be linked to North Korean actors, including the approximately $285 million exploit of Drift Protocol in April and the $36 million breach of Humanity Protocol in June.
