Bitcoin's rally hit a roadblock as the U.S. Federal Reserve opted to keep interest rates unchanged in its first policy decision of 2025. The widely anticipated move sent Bitcoin sliding by $1,000 almost immediately after the announcement. With inflation still a concern and President Donald Trump pushing for lower rates, investors are left wondering when or if the Fed will shift its stance.

At the time of writing, the top three cryptocurrencies, Bitcoin, Ethereum, and XRP, had not changed much in the past day but remained down on the weekly chart. Bitcoin Bitcoin While some may still be wondering what is Bitcoin, who created Bitcoin, or how does Bitcoin work, one thing is certain: Bitcoin has changed the world.No one can remain indifferent to this revolutionary, decentralized, digital asset nor to its blockchain technology.In fact, we’ve gone a long way ever since a Florida resident Laszlo Hanyecz made BTC’s first official commercial transaction with a real company by trading 10,000 Bitcoins for 2 pizzas at his local Papa John’s.One could now argue that While some may still be wondering what is Bitcoin, who created Bitcoin, or how does Bitcoin work, one thing is certain: Bitcoin has changed the world.No one can remain indifferent to this revolutionary, decentralized, digital asset nor to its blockchain technology.In fact, we’ve gone a long way ever since a Florida resident Laszlo Hanyecz made BTC’s first official commercial transaction with a real company by trading 10,000 Bitcoins for 2 pizzas at his local Papa John’s.One could now argue that Read this Term traded at $103k, representing a 0.86% and 1.29% decline in the past day and week, respectively.

Additionally, Ethereum Ethereum Ethereum is an open source, blockchain-based distributed computing platform and operating system featuring smart contract functionality. Created in 2014, Ethereum now stands as the second largest cryptocurrency by market cap at the time of writing.As a decentralized cryptocurrency network and software platform, Ethereum represents the most prominent altcoin. Ethereum also enables the creation Distributed Applications, or dapps. Understanding EthereumEthereum boasts its own programming language, Ethereum is an open source, blockchain-based distributed computing platform and operating system featuring smart contract functionality. Created in 2014, Ethereum now stands as the second largest cryptocurrency by market cap at the time of writing.As a decentralized cryptocurrency network and software platform, Ethereum represents the most prominent altcoin. Ethereum also enables the creation Distributed Applications, or dapps. Understanding EthereumEthereum boasts its own programming language, Read this Term changed hands for $3,114 on CoinMarketCap, representing a drop of 1.07% in the past day and 5% in the past week. XRP has also dropped more than 5% in the weekly chart.

Fed Holds Rates Amid Inflation

The Federal Reserve decided to maintain its benchmark interest rate at 4.25%—4.5%, citing inflation risks and economic uncertainty, Reuters reported. The move was expected, as the central bank had previously hinted at pausing rate cuts following a 25-basis-point reduction in late 2024.

However, the decision is likely to increase tensions between the Fed and the Trump administration, which has been vocal about the need for lower borrowing costs.

While last week's Consumer Price Index data suggested inflation was not as severe as anticipated, the Fed remained cautious. Officials omitted previous language about “progress” on inflation, signaling that concerns persist.

Fed Chair Jerome Powell and his team now face a complex economic landscape shaped by Trump's policy proposals, including potential tariffs and deregulation efforts.

Chair Powell answers reporters' questions at the FOMC press conference on January 29, 2025. https://t.co/siWde1Rh9D pic.twitter.com/NvVVU0cDxz

— Federal Reserve (@federalreserve) January 29, 2025

Trump's Economic Policies Add Uncertainty

If the Fed remains hesitant to cut rates further, riskier investments could face more pressure. President Trump's return to the White House has brought new economic policy challenges.

His calls for aggressive tariffs, including a proposed 25% levy on imports from Mexico and Canada, could disrupt global trade and fuel inflation. At the same time, his push for tax cuts and deregulation aims to stimulate growth but could also complicate the Fed's ability to manage inflation.

The central bank previously modeled different tariff scenarios in 2018 and concluded that aggressive trade policies could lead to higher inflation, potentially justifying rate hikes rather than cuts.