The recent inflation expectations of FED officials, led by Chairman Jerome Powell, attracted attention. In particular, they made statements about the potential for interest rate cuts. Thus, the statements affected various financial markets, including cryptocurrencies such as Bitcoin. Here is the impact of his speech on the Bitcoin price…
FED President spoke, the market’s Bitcoin price expectation increased
In his speech at the Stanford Graduate School of Business on Wednesday, April 3, Powell emphasized that the latest data on both employment gains and inflation exceeded expectations. He emphasized the importance of moving toward the Fed’s 2% inflation target before considering a significant rate cut. Powell emphasized that there is a general consensus among policymakers about the possibility of interest rate cuts later in the year, but such steps can only be taken with increased confidence in the course of inflation.
Powell’s cautious stance on rate cuts has implications for various asset classes, particularly Bitcoin and other cryptocurrencies, which tend to be sensitive to changes in monetary policy. The delay in interest rate cuts causes consolidation periods to extend for risky assets such as Bitcoin. Because high interest rates often act as a deterrent to growth.
Powell’s statements are already affecting cryptocurrencies
Powell’s statements have already affected the cryptocurrency market and Bitcoin is experiencing downward pressure. cryptokoin.com As we reported, Santiment reported that the Bitcoin price dropped to $65.5 thousand. This subsequently affected the broader cryptocurrency market. There was a decline in overall market capitalization and trading volume over the past seven days. This points to a period of consolidation and uncertainty.
Despite the short-term pressure on the Bitcoin price, institutional demand for crypto remains strong. Names such as Robert Kiyosaki voice their support for Bitcoin as a hedge against inflation. In particular, they highlighted the potential of Bitcoin alongside traditional safe-haven assets such as gold and silver. But Powell’s statements also point to a potential shift in sentiment that could positively impact cryptocurrencies in the long term.
Powell also influences the traditional market
It is worth noting that Powell’s words do not only affect the cryptocurrency market, but also have broader implications for traditional financial markets. Indices such as the NASDAQ and S&P 500 experienced significant price swings in response to Powell’s comments, reflecting the interconnectedness of various asset classes within the global financial system.
As a result, Jerome Powell’s cautious approach to interest rate cuts is critical. Because it brought uncertainty to financial markets and affected assets such as Bitcoin and stocks. Short-term volatility may continue. However, the long-term outlook for cryptos is affected by the Fed’s evolving stance on monetary policy and inflation.
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