Bitcoin (BTC) and Ethereum (ETH) plummeted immediately after Fed Chair Jerome Powell began the Jackson Hole speech. In one hour from start of the Fed Chair’s speech, BTC and ETH prices fell 1.83% and 1.80% respectively. This sharp fall comes at a time when macroeconomic factors are unfavorable to the cryptocurrency industry. Following the inflation data release earlier this month, the crypto market experienced a short rally. This came as a relief for the crypto traders who had a tough time this year due to high volatility.
Powell Speech Leads To Immediate Fall In Bitcoin Price
Powell began his speech saying the focus is on bringing inflation back to the 2 percent goal. The Fed Chair stressed on the importance of price stability for the economy and the Fed’s responsibility in it. He said higher interest rates, slower growth, and softer labor market conditions will bring down inflation. They will also bring some pain to households and businesses, he added in the Jackson Hole speech.
“Restoring price stability will take some time and requires using our tools forcefully to bring demand and supply into better balance. Reducing inflation is likely to require a sustained period of below-trend growth.”
A Slowing U.S. Economy
The Federal Reserve Chair said the U.S. economy is clearly slowing from the historically high growth rates of 2021. The growth in 2021 reflected the reopening of the economy following the pandemic recession, he explained. Powell opined that the country’s economy continues to show strong underlying momentum despite mixed economic data. “The labor market is particularly strong, but it is clearly out of balance, with demand for workers substantially exceeding the supply of available workers.”
Meanwhile, the price drop in Bitcoin and Ethereum after Powell speech is reflecting in the price movements of other cryptocurrencies. As of writing, Bitcoin is trading at $21,271, down 1.94% in the last 24 hours. Ethereu, on the other hand, is trading at $1,641.91, down 4.16% in the last 24 hours.
