Bitcoin, Ethereum Fall After Jerome Powell Warns Of ‘some Pain’ Ahead In Fighting Inflation – Share on Twitter Share on LinkedIn Share on Facebook Share on Telegram Share on WhatsApp Share on the Internet
Cryptocurrencies on rollercoaster ride as market reacts to Fed rate guidance Crypto markets posted some gains in Asian trade after this week’s crash, but sentiment turned negative as markets across the board tried to gauge the Fed’s thinking on interest rates. .
Bitcoin, Ethereum Fall After Jerome Powell Warns Of ‘some Pain’ Ahead In Fighting Inflation
Cryptocurrency markets have been booming since the collapse of the stablecoin Terra last month, but the biggest concern now in crypto and other financial markets is that global inflation is rising rapidly, indicating that the white streak will continue.
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While most currencies rose around 5% overnight, prices during Asian trading quickly matched these gains, with Bitcoin losing 5.5% and Ethereum 11%. Bitcoin has lost about 55% of its value since the start of the year to trade at $592 at press time. The non-tradable token (NFT) market has not recovered from recession.
Just last week, markets priced in a 50 basis point increase in interest rates by the US Federal Reserve to curb inflation at its monthly meeting today. But there is now speculation the Fed could raise as much as 100 basis points after Friday’s consumer price index (CPI) showed May inflation in the US at 8.6% – the highest in 40 years.
But the Fed has a difficult balancing act to avoid pushing the economy into recession. With billions of dollars of bonds on its books from quantitative easing, moving too quickly will increase debt repayments.
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“The Fed wants to try to show steady progress rather than create a period of panic and surprise in the market,” said Andrew Sullivan, a market analyst and former stock trader. “As we saw on Friday if that happens, the markets tend to fall and that’s not good for anyone.”
Markets took a hit over the weekend after the release of CPI data, with cryptocurrency market capitalization falling nearly 25% below $1 trillion for the first time since January 2021, according to CoinMarketCap data.
Stock markets were also hit hard, with the S&P 500 down 3.9% on Monday to confirm it is in a bear market.
Bitcoin Braced For A Bombshell From Fed Chair Jerome Powell
Raising interest rates is the main tool available to central banks to combat rising inflation by raising the cost of borrowing to cool an overheated economy. While the markets are focused on what Federal Reserve Chairman Jerome Powell will do today, the focus will also be on what performances he has in the future.
“A lot of that will come down, even though Powell explains, he’s been very good at trying to steer the market forward so the markets don’t get confused,” Sullivan said.
Investors still reeling from Terra stablecoin’s $40 billion crash are at risk of a rebound as another algorithmic currency, USDD, has lost its peg to the US dollar. The loss of parity in the dollar started the chain of events that led to the Terra disaster in early May.
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In an effort to bring the USD back into parity against the US dollar, the decentralized organization TRON (DAO) said it added $500 million to its set-aside reserves – to peg money for about two days.
Justin Sun, founder of Tron, said on Monday that he was setting up a $2 billion fund to protect the currency, but at press time the US dollar was trading at $0.9635.
If further disruption is needed, a cryptocurrency aggregator and lending platform halted user withdrawals, exchanges and transfers on Monday, citing “difficult market conditions.”
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The network stated that it is working as quickly as possible to address the problem, although it did not say when the procedures would resume.
The crypto roller coaster is also affecting the non-trivial token (NFT) market, where sales figures for the month of June have dropped significantly.
Sales reached $3 billion in May, but as of mid-June, sales had yet to reach $500 million, according to NFT data aggregator CryptoSlam.
Powell Warns Of Impending Pain, Bitcoin, Ethereum Plummet
The land price of Bored Ape Yacht Club NFT has dropped below $100,000 for the first time since August 2021. The current low is 78.5 ETH, or about $88,500.
“I don’t know anyone right now who is actually buying NFTs,” said Yehuda Beecher, NFT Relationship Strategist at CryptoSlam.
In an interview. “Most NFT projects I don’t think will survive this bear market,” he said, “I think that’s the big thing.”
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The war in Ukraine proved he defies government control, he says, while his version of inflation hedging wins in the long run, especially after periods of high inflation.
“We’ll see some dominance return to Bitcoin and we’ll see some altcoins disappear,” Keslin said, “and rightly so.”
Lachlan is a journalist and producer based in Melbourne, Australia. His work can be found in many Australian journals on subjects from culture to science. Lachlan has a bachelor’s degree in journalism from McCallie College in Australia.
Market Wrap: Crypto Traders Sell Off Fresh Gains
Analysts and traders across the cryptocurrency market have begun to assess its potential impact following the continued tightening of monetary policy by the Federal Reserve.
On Tuesday, the chairman of the US Federal Reserve, Jerome Powell, reiterated the commitment of the fiscal authority to continue tightening the pressure on monetary policy measures until inflation begins to show signs of weakness. The result could be that the next day, the main cryptocurrency bitcoin fell below $30,000 Against the background of the decline in traditional markets along with assessments by traders and analysts about the possible economic consequences of Powell’s comments.
Bitcoin’s decline over the past few weeks has best positioned the cryptocurrency to extend its seven-week losing streak. This is a trade that has been in decline for a long time, which was also in the early 2010s. in the crypto space.
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During the same period, other major cryptocurrencies followed Bitcoin’s decline with Polkadot (DOT) posting a roughly 6% loss, Etheruem (ETH), Avalanche (AVAX), XRP and Binance (BNB) also losing their normal value. Other cryptocurrencies such as Tron (TRX) were among the many crypto assets that managed to trade in the green with positive sentiment surrounding the chain’s stablemate, USDD.
On Tuesday, Powell said the Fed is consistently committed to reducing inflation along with concerns that they may use drastic measures to ensure a strong economic environment. At the Wall Street Journal event, Powell said that what everyone needs to see is that inflation is on its way to cleaning up and to be convinced, so they will continue to push their limits until they see it.
Chairman Fayed said that in order to achieve price stability, the restoration of price stability is among some of the unconditional needs. The financial authority has something to do because the economy is not really working for workers or for businesses even for those who have price volatility. This represents the bottom of the economy .
Morning Crypto Briefing: Bitcoin (btc) Bounces At $20k After Fed’s Powell Warns Us Recession Possible
The US Federal Reserve earlier pledged to keep an eye on inflation as it tightens balance sheets after nearly two years of sluggish stimulus to help an ailing economy amid the crippling effects of the coronavirus pandemic at the time
Andy is a blockchain developer who developed an interest in digital currencies while studying. He is a very detailed observer and shares his passion for writing and also being a developer. His background in blockchain helps him bring a unique perspective to his writing, with Bitcoin (BTC) and Ethereum (ETH) plummeting immediately after Federal Reserve Chairman Jerome Powell began his Jackson Hole speech. Within an hour of starting Yu’s speech After the Fed, Bitcoin and Ethereum prices fell by 1.83% and 1.80%, respectively. This sharp decline comes at a time when macroeconomic factors are unfavorable for the cryptocurrency industry. After the release of inflation data earlier this month, the cryptocurrency market saw a brief uptick. This comes as a relief to cryptocurrency traders who have had a tough time this year due to high volatility.
Powell began by saying that the focus is on returning inflation to the 2% target. The chairman of the Federal Reserve emphasized the importance of price stability to the economy and the Fed’s responsibility in it. According to him, higher interest rates, slower growth and soft labor market conditions will reduce inflation. He said in the Jackson Hole speech that they will cause some pain to families and businesses.
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“It will take some time to restore price stability and we must use our tools aggressively to achieve a better balance between supply and demand. Disinflation is likely to require a sustained period of below-average growth.” The US economy is slowing down
Federal Reserve chairman says US economy will clearly slow from historically high growth rates for 2021
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