The price of Bitcoin fell yesterday from $21,800 to $20,200, in 24 hours, after the president of the United States Federal Reserve (Fed), Jerome Powell, predicted difficult times for the US economy.
During his appearance at the annual conference held by the Kansas City Federal Reserve (Fed) in Jackson Hole, Wyoming, Powell warned that he must choose one of two paths: between a greater pain that would result in uncontrolled inflation or a lesser one that implies that families and companies will have to suffer a tougher, more restrictive monetary policy, in order to restore price stability.
He is going to opt for the second path, he said, and anticipated that interest rates will rise even more than the increases that were already being foreseen for the next meeting of the US central bank, which will take place next September.
Fed officials raised interest rates by 0.75 percentage point at each of their last two meetings, most recently in July, to a range between 2.25% and 2.5%.
Analysts pointed out that the measures that the Fed will impose make investors move away from risk, so the downward trend of the cryptocurrency is expected to continue.
“Last week’s decline has put the bears in command. It will take a while for the market to reverse,” analyst Alex Kruger told crypto asset site CoinDesk.
But not only Bitcoin suffered the onslaught of the news. Markets reacted lower as Walls Street’s leading indicators turned red after the speech.
At the close of operations on the New York Stock Exchange, the Dow Jones subtracted 1,008.38 points and fell to 32,283.40 integers, a drop of 3.03%.
The selective S&P 500 fell 3.37% or 141.46 points, down to 4,057.66 points. For its part, the Nasdaq market composite index, which brings together the main technology companies, fell by 3.94% or 497.56 integers, to stand at 12,141.71 units.
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