Bitcoin (BTC) plunged to its lowest level in more than a month as U.S. Federal Reserve Chair Jerome Powell reaffirmed its aggressive hawkish stance at the Economic Symposium on Friday morning. The biggest crypto by market capitalization plunging to a low of $20,549 and is currently trading at $20,666, a decrease of 4.3% in the past 24 hours and lower than the $21,000 perch BTC held while investors awaited Powell’s eagerly awaited presentation in Jackson Hole, Wyoming.
Powell stated that the Federal Open Market Committee’s decision whether or not to increase interest rates by 50 or 75 basis points at its September meeting would rely on “the entirety of the incoming information and the changing view.” Edward Moya, a senior market analyst at Oanda, said in a statement that traders will need to predict if risk appetite would cause bitcoin’s price to drop to $20,000 or not.
Moya remarked: “Risky assets are underperforming as Powell’s war against inflation will continue to be vigorous, triggering an economic downturn.”
Upon Powell’s presentation, the majority of alternative cryptocurrencies declined, with FLOW losing 11% over the preceding 24 hours. Ether (ETH), the second-largest crypto in terms of market capitalization behind bitcoin, fell 8.5%. The S&P 500 plummeted 3.25% and the tech-focused Nasdaq plunged 3.8% in response to Powell’s comments from equities investors.
In a much-anticipated address at the central bank’s annual economic symposium in Jackson Hole, Wyoming, Federal Reserve Chair Jerome Powell stated that tighter monetary policy would likely be needed for some more time.
Powell remarked, “Preserving price stability will involve some time and the aggressive use of our instruments to properly manage demand and supply.”
At first, Bitcoin (BTC) was somewhat unaffected by the Fed chair’s address, and many experts believed that Powell’s very hawkish remarks had been substantially priced into markets. Later, though, this altered substantially.
Josh Olszewicz, chief of research at crypto currency fund manager Valkyrie Investments, opined through an email that “We anticipate a 75 basis point rate hike in September, and do not anticipate a significant impact on the markets should this occur, usually accompanied by successive rate increases until inflation is curbed in and the jobless rate goes back to a healthier level.”
