Fed Chair Jerome Powell’s Hawkish Comments Throw Some Cold Water on Crypto

As a researcher, I’d rephrase it as follows: “In my assessment, the current state of the economy doesn’t demand immediate action to reduce interest rates. The robustness we observe allows us to move cautiously when making our decisions.

In response to Powell’s comments, the value of a bitcoin dropped approximately 1.5% to $88,300, briefly falling to $88,000 at press time, marking a decrease of 3.2% over the past day. Ether followed suit with a comparable decrease. In contrast, the broader CoinDesk 20 Index experienced a minor increase of 0.5% within the same timeframe, primarily boosted by a significant jump of 13% for Ripple. This surge might be attributed to speculation surrounding comments made by Securities and Exchange Commission Chair Gary Gensler, which some interpret as his potential resignation following Trump’s victory.

Initially perceived as highly likely, the probability of a Federal Reserve interest rate reduction during their December meeting, scheduled for mid-month, has dropped to approximately 62%, following Chairman Powell’s address. In contrast, just yesterday, the odds were estimated at 83%.

Recently, I’ve noticed a softening trend in traditional markets, primarily due to a more moderate stance taken by market players. This shift was particularly evident in the Nasdaq, which experienced a 0.75% drop towards the end of trading hours, reaching its session low.

Recently, the cryptocurrency market has experienced significant growth. Notably, Bitcoin is up by approximately 15% compared to last week, while digital assets such as Cardano (ADA), Ripple (XRP), NEAR Protocol (NEAR), and Stellar Lumens (XLM) have seen gains ranging from 20% to 40%.