Crypto News Today: Reasons Behind the Crypto Market Crash

Crypto News Today: Why is the Crypto Market Going Down Today?

El Salvador’s $1.4 Billion IMF Loan Deal

El Salvador, the first country to adopt Bitcoin as legal tender, has faced criticism from traditional financial institutions. The International Monetary Fund (IMF) has repeatedly urged the nation to modify its Bitcoin policy, particularly by reducing public sector exposure. However, El Salvador has not heed these warnings.

Now, a $1.4 billion loan deal with the IMF is on the table, which still needs to be approved. As part of the agreement, El Salvador has agreed to amend its Bitcoin policy. This move has sparked concern among experts, contributing to recent market volatility.

Bitcoin ETFs Report Largest Net Outflow of $680 Million

The US Bitcoin ETFs experienced their largest net outflow, with Fidelity’s FBTC leading the charge at $208.5 million. BlackRock’s IBIT remained steady with zero net flow. The market saw a significant drop of nearly 6% in the last 24 hours, with Bitcoin and major altcoins dropping heavily. The cumulative crypto market cap stands at around $3.3 trillion, while the fear and greed index remains in ‘Greed’. Notable outflows were also reported from Grayscale’s GBTC and Ark’s ARKB, with total withdrawals reaching $21.24 billion and $87.86 million, respectively.

Federal Reserve 25 basis points Cut Interest Rates , Bitcoin Strategic Reserve Uncertain

The United States Federal Reserve, under Jerome Powell's leadership, has once again lowered interest rates for the third time this year, with a 25 basis points (bps) cut. This move brings the Fed funds rate to a range of 4.25% to 4.5%. Powell emphasized the less restrictive nature of the Fed’s current economic policy, though he also cast doubt on the feasibility of a US Bitcoin strategic reserve, citing the Federal Reserve’s lack of authority to hold such an asset.

US Government Faces Shutdown Ahead of Christmas Holiday

The US government is on the brink of shutting down over the weekend unless Congress can agree on a plan. President-elect Donald Trump and billionaire Elon Musk derailed a bipartisan deal to keep federal agencies operational. In response, Republicans introduced a revised funding proposal—extending government operations for three months and suspending the debt ceiling until January 30, 2027—but it was overwhelmingly rejected in a House vote on Thursday, leaving the next steps unclear.