Mon Feb 24 23:00:00 UTC 2025: ## Crypto Market Reels from Hack, Fed Uncertainty Dampens Bitcoin Rally

**NEW YORK** – The cryptocurrency market is experiencing turbulence, driven by a major hack of the Dubai-based Bybit exchange and growing uncertainty surrounding the Federal Reserve’s monetary policy. Bitcoin, the largest cryptocurrency, briefly plummeted Friday following news of the hack, though it has since partially recovered.

The recovery, however, is fragile. Economists warn of a potential “nightmare scenario” for the Fed, with looming stagflation – a combination of slow economic growth and high inflation – posing a significant threat to bitcoin and other risk assets. A recent Bank of America survey revealed that expectations of stagflation within the next year have reached a seven-month high among global fund managers.

The Fed’s recent decision to hold interest rates steady, after initially cutting them, has further dampened market optimism. Analysts now anticipate rates remaining unchanged until potentially late 2025, if at all. The upcoming release of the personal consumption expenditures (PCE) price index, the Fed’s preferred inflation gauge, is expected to show inflation remains above the target 2%, potentially prompting further rate hikes. Some analysts even predict a rate increase this year.

Adding to the uncertainty is the ongoing political pressure on the Fed Chair Jerome Powell to resume rate cuts, particularly from former President Donald Trump. This conflicting pressure further complicates the situation for investors.

While some analysts remain optimistic about the long-term prospects of Bitcoin, fueled by potential institutional inflows and positive regulatory shifts, particularly in the US, the current market is characterized by a “wait-and-see” approach. The overall crypto market is described as exhibiting a “bouncing ball” effect, slowly declining over time, with a potential for a sharp price movement in either direction in the coming days. The immediate future remains uncertain, contingent upon any significant macroeconomic shocks, geopolitical events, or regulatory changes.

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