“The recent dip stems largely from the Fed’s cautious approach to rate cuts,” Teng said.
By Bena Ilyas
Edited by Marco T. Lanz
Updated
3 mins read
The crypto market has suffered a sharp decline, with Bitcoin falling below $90,000 for the first time since November 2024. As of February 25, 2025, Bitcoin trades near $87,730, reflecting a steep 6.90% drop within 24 hours. Investors have expressed concern, but Binance CEO Richard Teng dismisses fears of a prolonged downturn.
Here's my thoughts on the recent market turbulence: It's important to view this as a tactical retreat, not a reversal.
— Richard Teng (@_RichardTeng) February 25, 2025
Crypto has been here before and bounced back even stronger. Here's why we should stay optimistic. ⤵️
A thread 🧵
Teng highlighted that historical data indicates crypto markets respond to macroeconomic shifts similar to traditional financial assets. However, digital assets have consistently rebounded from sharp corrections. He cited the 2022 crash when Bitcoin briefly dropped below $20,000 following Federal Reserve interest rate hikes before recovering as conditions stabilized.
The recent market dip aligns with past short-term fluctuations, rather than exposing fundamental weaknesses in the sector. Price volatility often dominates, but the real growth drivers remain strong, Teng noted. Crypto has matured as an asset class and has repeatedly recovered from macroeconomic-driven downturns.
Several factors have contributed to the recent decline, with global economic uncertainty playing a major role. A $1.5 billion hack on the Bybit exchange has shaken investor confidence, adding to market instability. Meanwhile, concerns about US tariffs and rising inflation have prompted a shift away from riskier assets, including cryptocurrencies.
Teng attributed the decline to broader macroeconomic forces, particularly the Federal Reserve’s approach to interest rate adjustments. He underscored the temporary nature of the Fed’s pause, attributing the latest drop to its cautious stance on rate cuts. Teng said:
“It’s important to note that the Fed’s pause is temporary. The recent dip stems largely from the Fed’s cautious approach to rate cuts. While a March cut looks less likely now, it’s crucial to remember that monetary policy is data-driven.”
He emphasized that if inflation eases or labor market conditions weaken, the Fed may revise its policy stance, which could reignite market momentum. The current downturn, he argued, is more of a recalibration than a sign of prolonged weakness.
Despite the dip, institutional interest in crypto remains robust. Teng highlighted continued inflows into exchange-traded funds (ETFs) and steady submissions of new applications. Additionally, Binance has observed a consistent influx of new users, reinforcing the ongoing adoption of digital assets.
Market corrections, while unsettling, often create opportunities for seasoned investors, according to Teng. He noted that those who maintain a long-term perspective rather than reacting to short-term fluctuations are better positioned to capitalize on future gains.
This resilience has been evident in previous downturns, proving that crypto can withstand macroeconomic pressures. Teng encouraged investors to focus on the long-term fundamentals of the industry rather than getting caught up in short-term volatility.
Disclaimer: Coinspeaker is committed to providing unbiased and transparent reporting. This article aims to deliver accurate and timely information but should not be taken as financial or investment advice. Since market conditions can change rapidly, we encourage you to verify information on your own and consult with a professional before making any decisions based on this content.
With over 3 years of crypto writing experience, Bena strives to make crypto, blockchain, Web3, and fintech accessible to all. Beyond cryptocurrencies, Bena also enjoys reading books in her spare time.
