$70 Billion Wiped Out After Fed’s Shocking Inflation Warning

 

Crypto Market Suffers Sharp Decline as Fed Inflation Warning and Trade Uncertainty Shake Investor Confidence

The global cryptocurrency market took a significant hit on Thursday, falling 1.83% and erasing roughly $70 billion in market value within 24 hours. The downturn extended October’s losses to 4.65%, marking one of the toughest months for digital assets this year.

The sharp decline came shortly after the U.S. Federal Reserve’s latest policy decision, where it cut interest rates by 25 basis points to 3.75%. However, optimism over the easing was short-lived. Fed Chair Jerome Powell’s remarks on persistent inflation and downside risks to employment rattled markets, sending both traditional and digital asset investors into risk-off mode.

“Inflation remains above our long-term target, and we’re prepared to maintain restrictive policy as long as necessary,” Powell said during the post-meeting press conference. “While the labor market has shown resilience, we’re seeing signs of cooling that warrant close monitoring.”

Crypto Market Reacts Sharply to Fed Comments

Bitcoin (BTC), the world’s largest cryptocurrency, slipped below the critical $110,000 support level, its weakest position since early September. Ethereum (ETH) followed, dropping 2.6% to around $5,980, while Solana (SOL) and Avalanche (AVAX) fell over 3% each.

According to data from Coinglass, approximately $657 million worth of crypto positions were liquidated over the past 24 hours — with 77% of them being long positions, reflecting how traders had bet on a rebound that never came.

Analysts say Powell’s remarks have shifted investor sentiment sharply toward caution. “The Fed’s message is clear — inflation isn’t tamed yet,” said Maria Benson, an economist at the Blockchain Policy Institute. “Crypto, being a high-risk asset class, is always the first to feel the sting of monetary tightening or hawkish signals.”

Despite the Fed’s rate cut, markets interpreted Powell’s tone as less dovish, with futures traders lowering expectations for further cuts before mid-2026. The move has reignited fears that liquidity in the crypto market could tighten, stalling momentum that had been building since midyear.

Trade Uncertainty Adds to Market Anxiety

The pressure on digital assets intensified as doubts resurfaced around the durability of a U.S.-China trade truce. Optimism that had buoyed global markets earlier this week quickly faded as both nations signaled ongoing disagreements over technology exports and rare earth materials.

In Seoul, U.S. President Donald Trump met Chinese President Xi Jinping in an attempt to cool tensions that have rattled global investors. “We’ve already made great progress,” Trump told reporters ahead of the meeting. “I believe that we’ll have a strong relationship in the long term.”

However, the fragile détente faced immediate skepticism. China’s decision to maintain export restrictions on rare earth elements — critical for semiconductor and EV production — along with Trump’s insistence on keeping some tariffs in place, fueled concerns of renewed trade friction.

The crypto sector, known for reacting quickly to global economic signals, reflected the broader unease. Bitcoin’s steep fall from $121,560 to $103,000 earlier this month has already underscored how sensitive the market remains to macroeconomic shifts.

“The combination of monetary caution and trade uncertainty is creating a perfect storm for risk assets,” said Henry Liu, CEO of market analytics firm BT Markets. “Crypto has matured, but it still mirrors the risk sentiment of tech-heavy equities — when investors retreat from growth, Bitcoin and altcoins often bear the brunt.”

Political Landscape Turns Crypto-Friendly in New York

Amid the market turbulence, a major political development caught the attention of digital asset enthusiasts. In New York City, the crypto advocacy group Innovate NY officially endorsed Andrew Cuomo for mayor.

The group, which describes itself as a “pro-digital asset political action organization,” has raised nearly $100,000 to support candidates favorable to blockchain innovation. Innovate NY cited Cuomo’s proposed Innovation Council, which aims to integrate AI, tokenization technologies, and public-benefit stablecoins into the city’s economic agenda.

“New York can either lead or lag behind the next financial revolution,” said Innovate NY spokesperson Jenna Ortiz. “Cuomo understands that Web3 and blockchain aren’t fringe ideas — they’re the infrastructure of the future.”

Cuomo’s main rival, Democrat Zohran Mamdani, has focused his campaign on housing and cost-of-living issues, while Republican Curtis Sliwa has taken a moderate stance on crypto adoption. The mayoral election is slated for November 4, with early voting already underway.

Political analysts suggest that the endorsement could tilt younger, tech-savvy voters toward Cuomo, especially as crypto continues to weave into broader economic discussions.

Institutional Moves: Grayscale Unveils Solana Staking ETF

While retail investors grappled with market volatility, institutional developments continued apace. Grayscale Investments announced the launch of its Solana Staking ETF, becoming the first U.S.-based fund to offer exposure to SOL staking rewards.

The ETF filing comes after Bitwise Asset Management took similar steps earlier this year. Grayscale’s decision, analysts say, is a strategic attempt to attract institutional capital amid the growing popularity of Solana’s proof-of-stake model.

The move also arrives just weeks before Ethereum’s “Fusaka” upgrade, scheduled for December 3, 2025. The final testnet, known as Hoodi, went live this week, paving the way for the mainnet rollout.

The upgrade introduces several major improvements — including EIP-7594 (Peer Data Availability Sampling), which increases node efficiency, and EIPs 7825 and 7935, designed to boost gas limits and enable parallel transaction execution.

“Ethereum’s Fusaka upgrade could be as transformative as the Merge,” said blockchain researcher Olivia Tan. “It’s tackling scalability head-on, addressing one of the core components of the blockchain trilemma — balancing decentralization, security, and scalability.”

Market watchers believe Grayscale’s move signals continued institutional interest in proof-of-stake networks, despite the broader correction. “Institutions are taking the long view,” noted Tan. “They see beyond day-to-day volatility. The infrastructure narrative remains bullish.”

Outlook: A Test of Market Resilience

As October draws to a close, the crypto market faces a defining test. With inflation concerns, trade uncertainty, and political shifts converging, investors are grappling with a volatile landscape.

While short-term sentiment remains cautious, analysts note that fundamental development — from ETFs to protocol upgrades — continues to support the long-term adoption of blockchain technology.

“The underlying story hasn’t changed,” said Benson. “Every cycle has its shakeout, but innovation keeps building. The market will rebound — it’s a matter of timing and confidence.”

For now, all eyes are on the Fed’s December meeting and potential follow-up trade announcements between Washington and Beijing. Until then, crypto traders may need to brace for continued turbulence.

Source

Writer @Ellena

Erlin is an experienced crypto writer who loves to explore the intersection of blockchain technology and financial markets. She regularly provides insights into the latest trends and innovations in the digital currency space.

 

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