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Crypto Plunges Amid Conflicting Fed Messages and Concerns Over Data Breaches

Crypto Plunges Amid Conflicting Fed Messages and Concerns Over Data Breaches

Bitget-RWA2025/11/03 04:20
By: Bitget-RWA
- Crypto prices fell amid conflicting Fed signals and U.S.-China trade deal uncertainty, despite eased trade restrictions and a 25-basis-point rate cut. - A UK data breach case highlighted crypto's vulnerability to insider fraud, with regulators expanding enforcement against data misuse in financial crimes. - Market volatility intensified as Fed's halted quantitative tightening created liquidity uncertainty, echoing 2019's 35% Bitcoin drop after QT ended. - Analysts remain cautiously optimistic about long-

Cryptocurrency values extended their decline this week as investors navigated mixed signals from global economic trends and shifting geopolitical landscapes. Although the U.S. Treasury Department recently relaxed certain trade barriers with China and the Federal Reserve implemented a 25-basis-point rate reduction, digital asset markets stayed negative. Many investors pointed to ongoing ambiguity surrounding monetary policy and regulatory threats, as reported by

. These overlapping influences have made traders cautious, even though some experts suggested in a article that the Fed’s move to stop quantitative tightening could ultimately bring more liquidity to riskier investments.

The trade agreement between the U.S. and China, announced by Treasury Secretary Scott Bessent, involved the U.S. pausing restrictions on Chinese firms buying sensitive technologies, while China agreed to ease its rare earth mineral export controls. Cointelegraph noted that such deals typically support crypto prices by smoothing global supply chains, but this time the effect was limited. Investors pointed to mixed messages from the Federal Reserve, especially after Chair Jerome Powell acknowledged “strongly differing views” among officials regarding a possible rate cut in December, highlighting the lack of agreement on future policy. This uncertainty triggered significant crypto sell-offs, with CoinGlass reporting over $822 million in liquidations within just 24 hours.

Crypto Plunges Amid Conflicting Fed Messages and Concerns Over Data Breaches image 0

Adding to the market’s unease was the Federal Reserve’s choice to stop quantitative tightening, a decision that has historically marked the beginning of increased market liquidity. Still, the period between ending QT and starting quantitative easing—when new funds enter the market—left cryptocurrencies exposed to further losses. This reaction mirrored previous cycles:

dropped 35% in 2019 after the Fed concluded QT, and similar concerns are now re-emerging.

Elsewhere, the UK saw a notable case where a former Virgin Media O2 staff member was penalized for leaking customer information that enabled a $1.54 million crypto scam, according to

. This was the first prosecution under the Data Protection Act 2018 for insider data misuse in financial crime, highlighting weaknesses in investor trust. The compromised data fueled a boiler-room operation that targeted victims with fraudulent digital asset offers, emphasizing the dangers of personal data leaks in the crypto sector. Regulatory bodies like the Financial Conduct Authority are now broadening their oversight, directly connecting data protection breaches to financial misconduct—a development that could have far-reaching effects on confidence in crypto markets.

Despite these headwinds, some analysts maintain a guarded sense of optimism. The U.S.-China trade pact’s potential to steady international supply chains and the prospect of increased liquidity from the Fed’s policy adjustments could eventually favor high-risk assets such as cryptocurrencies. Nevertheless, the outlook remains clouded by near-term volatility and heightened regulatory attention. As one market expert put it, “There’s a lot of uncertainty being factored in. Until the Federal Reserve’s direction becomes clearer and data security standards are established, crypto is likely to stay under pressure.”

Disclaimer: The content of this article solely reflects the author's opinion and does not represent the platform in any capacity. This article is not intended to serve as a reference for making investment decisions.
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