A modest Bitcoin rally to a possible challenge of the level of $ 86,000 quickly overturned during the negotiation hours of the American afternoon on Wednesday while the president of the federal reserve, Jerome Powell, warned the effects of the pricing regime of President Trump.
“The level of pricing increases announced so far is significantly larger than expected,” said Powell in a speech. “The same goes for economic effects, which will include higher inflation and slower growth.”
In other words, Stagflation – a return to a significant part of the 1970s when the United States experienced low economic activity and two -digit inflation.
“We can find ourselves in the difficult scenario in which our double -compressed objectives are in tension,” continued Powell.
The Bitcoin (BTC) price fell by around 2.5% in the minutes that followed Powell’s comments, now negotiating $ 83,700, down 1.5% in the last 24 hours.
The American actions, which had tried to set up a return from the opening of the drops, were also affected, the Nasdaq dropped from 3.4% to a hollow of session.
Powell also mentioned that the crypto is becoming more and more common, there is a need for a legal framework for stablescoins. He said that the banking settlement around the crypto will probably be “partially relaxed”.
The Banque Committee of the US Senate has erased a bill to regulate stablecoin issuers in March, marking the approval of the first committee and an important step in the United States
Hawkish Fed weighs the crypto and the BTC
“Powell came out extremely atrocist,” said Quinn Thompson, investment director of the Hedge Fund Lekker Capital, in a telegram message. It should be noted that Powell has minimized the market turmoil last week calling it “ordered market operation”, he added.
“I at least expected that he wink at high volatility and breaks on the treasury market, but he did not do it,” said Thompson.
Powell’s tone suggests that investors should temper their expectations for rate drops in the next meetings, said Thompson, who could weigh on risk assets, including crypto.
“It seems that a cut in May is firmly outside the table except for the Fed intervention for bad reasons and I would not say that June is a lock,” concluded Thompson. “The case of a bull for crypto and bitcoin is specifically is an intervention of liquidity and decision -makers. The two seemed very far, it is therefore difficult for me to paint a constructive table in the immediate term.”
Update (April 16, 18:40 UTC): Add additional comments made by President Powell to the Stablecoins. Add comments from the analyst.
