Bitcoin price slips as Fed minutes flag US inflation risks
May 29, 2025
Bitcoin (BTC-USD) dipped by around 1% on Thursday, following the release of minutes from the Federal Reserve’s May policy meeting, which revealed mounting concern over persistent US inflation and the potential for economic slowdown.
Bitcoin was hovering just below $108,000 (£80,244). The dip comes shortly after bitcoin set a new all-time high above $111,000 on 22 May.
The minutes from the 6-7 May Federal Open Market Committee (FOMC) meeting showed Fed officials warning they may soon face “difficult tradeoffs” as inflation remains stubbornly high and unemployment begins to rise.
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Officials also highlighted risks to financial stability, pointing to recent bond market volatility and cautioning that shifting perceptions of the US dollar’s safe-haven status could have lasting repercussions for the global economy.
The broader cryptocurrency market also fell on Thursday, with total market capitalisation falling more than 2% to around $3.54tn, according to data from CoinGecko.
“This week’s FOMC minutes and the upcoming Core PCE inflation data arrive at a fragile moment for macro-driven assets like Bitcoin,” Bitfinex head of derivatives Jag Kooner said.
“Traders aren’t just watching for signals on interest rates, they’re looking for insight into how the Fed interprets inflation risks in light of new tariff policies, particularly after the US imposed a 50% levy on EU imports.”
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US equities also edged lower Wednesday. The S&P 500 (^GSPC) slipped 0.6% but remains within 4.2% of its all-time high. The Dow Jones Industrial Average (^DJI) fell 244 points (0.6%), and the Nasdaq Composite (^IXIC) declined by 0.5%.
The market lull came ahead of Nvidia’s (NVDA) eagerly anticipated earnings release, which was published after market close on Wednesday. Nvidia shares dipped 0.5% ahead of the report.
Despite Wednesday’s decline, sentiment improved in overnight trading. Futures pointed to a strong open on Thursday in New York as Dow futures were up 1.16%, S&P 500 futures gained 1.47%, and Nasdaq futures jumped 1.82%.
US stock futures rose following a landmark decision by a US trade court on Wednesday that struck down most of president Donald Trump’s “Liberation Day” tariffs, ruling he had exceeded his authority by imposing broad duties on imports from key trading partners.
The Court of International Trade found that the US Constitution grants Congress exclusive power to regulate foreign commerce, a power not overridden by the president’s emergency authority to protect the domestic economy.
Bitcoin’s price movements this week coincide with the annual Bitcoin Conference, currently underway in Las Vegas, where US vice president JD Vance addressed a crowd of crypto enthusiasts.
In a speech on Wednesday, Vance said that China’s skepticism toward bitcoin should motivate the US to embrace the digital asset and build on its strategic edge in the sector. China has banned crypto trading and mining since 2021.
“The People’s Republic of China doesn’t like bitcoin. Well, we should be asking ourselves, why is that? Why is our biggest adversary such an opponent of bitcoin, and if the communist Republic of China is leaning away from bitcoin, then maybe the United States ought to be leaning into bitcoin,” he said.
As the White House pushes for an overhaul of crypto policy, Vance said bitcoin will be a strategically important asset for the US over the next decade. He also praised Trump’s March executive order establishing a strategic bitcoin reserve using tokens already held by the US government.
Digital assets have seen a resurgence under Trump, who has actively courted support from the crypto industry, pledging during his campaign to be a “crypto president.”
Meanwhile, traditional finance continues to deepen its ties to crypto. Investment management company BlackRock (BLK) is reportedly planning to acquire around 10% of the shares offered in USDC stablecoin issuer Circle Internet Financial’s upcoming IPO, according to sources familiar with the matter, as reported by Bloomberg.
Circle, the issuer of the USDC stablecoin, filed for a public listing on the New York Stock Exchange on 27 May The offering includes 24 million Class A shares, 9.6 million from the company and 14.4 million from existing shareholders.
The IPO aims to raise up to $624m, with Cathie Wood’s Ark Invest also expressing interest in purchasing up to $150m worth of shares. The underwriters have a backup option to sell up to 3.6 million extra shares if the IPO is well received, which helps manage volatility and investor demand.
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