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The recent downturn is largely attributed to comments made by Federal Reserve Chairman Jay Powell, who indicated that interest rate cuts in 2025 may not be as substantial as previously hoped. While investors initially anticipated a decrease in the cost of capital that could alleviate some financial burdens, Powell's remarks suggested a more tempered approach, leading to a significant market response that wiped out approximately $2 trillion from the stock market.
This cascading effect has naturally spilled over into the cryptocurrency markets, where declines in stock prices often lead to parallel downturns in digital assets. The atmosphere of fear and uncertainty permeates across various sectors, leaving many investors questioning their positions and strategies.