Key facts
- US spot Bitcoin and Ether ETFs saw $111 million in outflows on Wednesday.
- The Federal Reserve held interest rates steady.
- Federal Reserve projections indicate potential future rate hikes.
- The Federal Reserve anticipates higher interest rates through 2026.
- Illinois passed a direct cryptocurrency tax.
- Illinois is the first state to pass a direct crypto tax.
Cryptocurrencies experienced a notable decline, with US spot Bitcoin and Ether ETFs recording combined outflows totaling $111 million on Wednesday. This outflow suggests a potential cooling of institutional demand for digital assets. The downturn coincided with a hawkish stance from the Federal Reserve, which opted to hold interest rates steady but released projections indicating a possibility of further rate hikes. The Fed's updated outlook anticipates higher interest rates persisting through 2026, effectively quashing previous expectations of imminent rate cuts that had previously supported a market recovery rally. Adding to the negative sentiment, Illinois has become the first U.S. state to pass a direct cryptocurrency tax. This legislative action by Illinois introduces a new layer of regulatory and financial consideration for crypto assets within the state, potentially impacting trading and investment decisions.