The crypto market saw a sharp correction on Nov. 3 after Federal Reserve official Austan Goolsbee said his threshold for cutting in December is higher than at previous meetings, dampening investor hopes for another round of monetary easing.

“I’m not decided going into the December meeting,” Goolsbee said Monday in an interview with Yahoo Finance. “I am nervous about the inflation side of the ledger, where you’ve seen inflation above the target for four and a half years, and it’s trending the wrong way.”

Goolsbee indicated that the threshold for cutting rates is now higher than at the previous two Fed meetings, signaling a more hawkish stance than investors had hoped for.

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He said that interest rates should decline alongside inflation, adding that rates will eventually settle “a fair bit below current levels.”

His comments follow last week’s Fed decision to lower the federal funds rate by 25 basis points to a range of 3.75% to 4%, while signaling the end of balance-sheet reduction starting Dec. 1.

Chair Jerome Powell described further cuts as “not a foregone conclusion,” language analysts viewed as an attempt to cool market enthusiasm after a month-long risk rally.

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Digital assets were among the first to react. Bitcoin (BTC) dropped 1.6% to $105,700, Ethereum (ETH) fell 2.5% to $3,600, and XRP lost more than 2.4%, according to CoinGecko data.

The broader crypto market capitalization declined 3.2% over the past 24 hours to $3.62 trillion, as investors rotated into cash and short-duration assets amid renewed rate uncertainty.

CoinShares analysts said the remarks “reintroduced hawkish bias at a fragile moment,” especially as U.S. government shutdown negotiations continue.

“Bitcoin was the main underperformer this week, recording outflows of $851 million,” CoinShares wrote in an Oct. 31 market update, while noting that Ethereum and Solana saw moderate inflows of $133 million and $380 million, respectively.\\"

According to CoinShares, Bitcoin funds recorded $851 million in outflows in the week ending Oct. 31, while Ethereum and Solana saw modest inflows of $133 million and $380 million, respectively.

\\"It appears investors took Jerome Powell’s hawkish forward guidance at face value, reducing exposure amid a perceived decline in the likelihood of a December rate cut. We expect these rate expectations to recalibrate once the government shutdown ends and delayed macroeconomic data are released, which should offer a clearer picture of the underlying economic damage and policy response ahead,\\" Coinshare analysts added.

This story was originally reported by TheStreet on Nov 3, 2025, where it first appeared in the Trading News & Analysis section. Add TheStreet as a Preferred Source by clicking here.