Jerome Powell is the Federal Reserve Chairman. Recently, he spoke at Jackson Hole, Wyoming. In fact, this speech has become a hot topic of discussion within the crypto world. Recently there were signs of the inflation rate slowing down. But the speech by Powell has cancelled out any feeling of relief. He clearly stated that it will take some further time for the inflation rate to drop. He further added that the central bank will “use its instruments decisively”. Moreover, he added that there is a need for “ a restrictive policy stance” for the time being, to bring back price stability. However, this will need some time and till then the people will have to put up with larger rate hikes that are yet to come.
In fact, this speech by Jerome Powell affected the US economy almost instantly. The US equities shed 1.25 trillion in a single session. In fact, the total crypto market cap dropped by 8.95% from $1.029 trillion to settle at $936.87 billion, at one point overnight. However, the worst is in store for Bitcoin users. Bitcoin is already going through a really troublesome bear market. Now, with the comments made by Jerome Powell, the BTC price has dropped even below the $21,000 mark. If you wish to learn more about the reaction of Bitcoin to Powell’s speech, then this article is the perfect stop for you. Keep reading this article for a detailed understanding of the present scenario of the Bitcoin market after the speech by Powell.
Bitcoin Takes The Blow
The year 2022 has been a year when Bitcoin has already witnessed rapid liquidations. At one time the BTC price briefly crossed the $25,000 mark. But after that, the downward slide is taking the price towards a frighteningly low point. In fact, in November 2021, the price of Bitcoin reached its all-time high of $69,045. From there, it witnessed a 70% decline. At present, the price stands at $20,229. However, after the speech of Jerome Powell, the price of Bitcoin witnessed a sharp decline. In addition, The S&P 500 index declined by more than 2% in tandem with the cryptocurrency market.
Ether is the second largest cryptocurrency. But after the speech of Jerome Powell, the price of Ether declined by around 5%. Polkadot, Cardano and Solana also witnessed a price drop of around 4%.
The comment by Jerome Powell has come to the point when the Fed has been hiking interest rates to control inflation. At present, the US is experiencing an inflation rate which is the highest in the last 40 years. This has resulted in the investors fleeing from the market due to the fear of running into loss. However, this inflation is especially painful for Bitcoin users. In fact, certain data indicate that this bear market is going to be a long one for Bitcoin. Therefore, Jerome Powell has added to the pain of Bitcoin users.