Bitcoin has fallen sharply, dropping along with stock markets after the Federal Reserve warned inflation remained sticky and BlackRock spooked the market.

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The bitcoin price has plummeted toward $90,000 per bitcoin, dragging the wider crypto market lower and wiping away around $500 billion worth of value from the $3.2 trillion crypto market.

Bitcoin’s drop of around 10% in the last 24 hours was dwarfed by ethereum and smaller, top ten cryptocurrencies—including solana and dogecoin—that crashed back by between 15% and 25%.

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This week, Federal Reserve chair Jerome Powell disappointed traders when he warned interest rates would not come down as quickly as the Fed had previously thought, reducing its planned number of cuts to just two in 2025, from four previously.

“Comments from the Federal Reserve were a wake-up call,” Danni Hewson, AJ Bell’s head of financial analysis, said in emailed comments.

“Inflation is proving sticky and tax cuts and tariffs could be a recipe for reflation. “Risk appetite has been pared back. Trump 2.0 is a known unknown and no one wants to be overexposed if the climate proves inhospitable.”

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Meanwhile, bitcoin price and crypto market watchers have warned of further volatility ahead.

“Expect to see volatility levels for both ethereum and bitcoin increase as we head into early 2025, particularly around the settlement of the December 27, 2025 expiry,” Nick Forster, founder of decentralized finance (DeFi) protocol Derive, said in emailed comments, but adding he expects the bitcoin price and wider crypto market to recover through 2025.

“We’re observing a trend where funds and high net-worth individuals are moving into options with longer expiries, like those set for September and beyond, reflecting a positive outlook for 2025. This shift is evident from the open interest in calls significantly outnumbering puts on Derive.xyz, signaling strong market optimism.”