Bitcoin price dropped after Jerome Powell’s speech
At the end of last week, Bitcoin dropped almost 5% in value and fell below $20, 000. Bitcoin price dropped to this level for the second time this summer. The last time such a low Bitcoin rate was registered in June.
Previously, inflationary processes had a positive effect on the crypto prices, causing its temporary increase. Bitcoin and Ethereum have increased in price by about 4% and 5%, respectively.
The rate of Bitcoin started falling noticeably on Friday after Federal Reserve Chairman Jerome Powell gave a speech at an economic symposium.
Powell said that the Fed will use tough methods in order to return the inflation rate to the target value. Moreover, it is planned to maintain a high refinancing rate.
This statement negatively affected the crypto market, as cryptocurrencies are often used as insurance from inflation of fiat currencies. In 2022, Bitcoin is highly dependent on the US stock market.
At the end of July, the Fed raised the base rate. And the Bitcoin price began to rise. In mid-August, the prices for crypto reached a local peak of $25, 000. Then the rate began to fall. Thus, Bitcoin has fallen in price almost twice this summer. In August, the asset price fell by almost 15%.
Ethereum price has also decreased. At the end of last week, its rate dropped below $ 1,500.
Earlier, Glassnode’s analysts predicted a Bitcoin’s price increase. However, they said that the market needs time to recover. At the same time, Galaxy Digital CEO Mike Novogratz believes that it is unlikely for Bitcoin to exceed the $30,000 price tag anytime soon.
Despite the crash of the crypto market, experts believe that mining remains a profitable business in the long term.