The price of the world’s largest cryptocurrency by market capitalization dropped below $25,000 on Wednesday for the first time since March, as the U.S. central bank announced that it would pause increases in interest rates since hiking them up consecutively for more than a year.
The dip happened dramatically late Wednesday afternoon, according to data from CoinMarketCap, and in roughly an hour, the price of Bitcoin plummeted from approximately $25,868 to about $24,902. As of Thursday morning, the price has stabilized, with one Bitcoin hovering around $24,900, an approximate 4% decline since Wednesday afternoon.
Ether, the native cryptocurrency for the Ethereum blockchain and second-largest token by market cap, also dropped from about $1,728 to $1,635, about 5%, per CoinMarketCap. And the total market cap for all cryptocurrencies dropped from about $1.06 trillion to now $1.02 trillion, roughly 4%.
“The biggest reason for [Bitcoin’s] sudden plunge yesterday was likely the Fed, where, despite pausing, it took a more hawkish tone than expected and indicated that more rate hikes are still on the table,” Brian Rudick, a senior strategist at crypto trading firm GSR, told Fortune. “In addition, there’s a lot of uncertainty in the market due to the U.S. regulatory posture.”
Rudick noted that Ether dropped before Bitcoin and the market downturn was “ETH-led.”
The downswing of the cryptocurrency market mirrored the immediate decline of the major stock indexes after the Federal Reserve announced the pause on rate increases. The S&P 500 immediately dropped about 1%. (It then quickly rebounded before markets closed.) The Nasdaq, which is comparatively dominated by the tech stocks that Bitcoin has been previously said to mirror, also had a brief drop and rebound.
The decline in Bitcoin’s price reflects how the cryptocurrency tends to react quickly to news of the Fed’s decision to increase, decrease, or hold steady interest rates.
In May, for example, its price rocketed above $29,000 following the Fed’s announcement that it would continue to raise rates. However, Bitcoin has since fallen more than $4,000, an approximate 14% decrease, as the U.S. government has continued to crack down on crypto, including blockbuster lawsuits against Binance and Coinbase, two of the world’s largest crypto exchanges.