All things being equal, easier Fed monetary policy tends to lead to a weaker U.S. dollar, falling bond yields, rising precious metals prices and gains for risk assets, bitcoin and crypto among them.
Following the Fed’s rate cut yesterday, the dollar is indeed weaker — the DXY falling to a seven-week low — precious metals are sharply higher, with silver touching a new record of $64 per ounce, and the 10-year Treasury yield has pulled back to 4.12% from 4.20%.
In what’s become a familiar story, though, crypto is not participating. After (very) briefly rallying above $94,000 in the minutes following the rate cut, bitcoin has slumped to $89,400, now down 3% over the past 24 hours. Ether is down 5.5%, while XRP and solana slide closer to 4%.
Possibly souring the mood in crypto are declining AI-related names following Oracle’s (ORCL) disappointing quarterly earnings released last night. Oracle has plunged 14% on Thursday, pulling down familiar names like Nvidia, AMD and Broadcom. The Nasdaq is lower by 1.2%.
Bitcoin mining stocks — many of whom have pivoted business models to focus instead on AI infrastructure — are lower alongside: Hut 8 (HUT), Iren (IREN), Cipher (CIFR) and Riot Platforms (RIOT) are among those with losses in the 5%-6% range.
Leading bitcoin treasury player Strategy (MSTR) is off by 6.4%, while crypto exchange Coinbase (COIN) is down 5%. Robinhood (HOOD) is lower by 8.3% after a November update showed a disappointing slump in crypto trading volumes.