Bitcoin Drops To $19k Again As The Fed Renews Inflation Warnings• July 1, 2022 4:21 pm • Comments
Currently, the price of Bitcoin continues to hover around the $19k area as central banks like the Federal Reserve renew their warnings regarding inflation.
The recent downturn is not just for one particular digital asset, but applies to the majority of the crypto industry as the aggressive monetary policy from the Red is sparking fears of the next recession.
Fed Chair Jerome Powell specifically stated that he was more concerned about the inflation than the possibility of a recession though.
As a result, investors are now more than convinced that a recession is inevitable and the markets are reacting to this already.
What happens to crypto during this recession will also reveal a lot on the role that the industry will play in the future.
Gold prices moved very volatile throughout last Wednesday's session,FED Jerome Powell Statement Lifts US Dollar Index And Pushes Gold And Crypto Prices Back To Bearish Path
Powell Calls The Risk Of An Economic Recession And Inflation Still A Big Problem#Crypto#bali#BTC pic.twitter.com/xFOZJ1NCFU
— Balifornia Crypto 🌴🌊 (@baliforcrypto) June 30, 2022
Federal Reserve Chairman Jerome Powell reiterated the central bank’s commitment to increasing interest rates to curtail inflation. Speaking at the ECB meeting, he said he was more concerned about the challenge posed by inflation than about the possibility of higher interest rates pushing the U.S. economy into a recession.
“Is there a risk we would go too far? Certainly, there’s a risk,” Powell said. “The bigger mistake to make – let’s put it that way – would be to fail to restore price stability.”
Powell said the Fed had to raise rates rapidly, Reuters reported, adding that a gradual increase could cause consumers to feel that higher prices of commodities would persist. About a week ago, his comments suggested rate hikes could soften before next year.
U.S. equity market futures fell following Powell’s comments, with S&P 500 futures dropping 1.59% and those on the tech-heavy Nasdaq 100 falling 1.9%. Asian markets were in the red with Japan’s Nikkei 225 declining 1.54% and the Asian-focused index Asia Dow falling 1.14%.
It is not only the Federal Reserve within the United States that are now enacting aggressive monetary policies, but also other central banks around the world.
The common agreement across the board is to raise interest rates even as prices continue to increase due to the inflation.
As a result, this has caused a lot of selling pressure on the markets with the crypto market being no exception to this.
With that being said, financial institutions still see crypto as a popular alternative asset in order to preserve wealth in addition to holding fiat currencies.
Bitcoin Drops to Nearly $19K as Fed Renews Inflation Warnings – CoinDesk https://t.co/EPpl3UpPdw #crypto #egafintech
— ega fintech (@egafintech) July 1, 2022
Central banks across the globe are weighing interest-rate increases amid surging price pressures. Spain reported a 37-year record inflation of 10% earlier this week, while India and China are grappling with the risks of economic contraction.
Such concerns add to already critical selling pressure on bitcoin. The asset has traded similar to risky technology stocks in the past few months and has lost some 58% this year.
Contagion risks from within the crypto industry, such as the possible insolvency of crypto lenders and the blow-up of prominent crypto fund Three Arrows, have further caused downward pressure on the asset that was otherwise conceived as a potential hedge against inflation.
🔸 Bitcoin drops to nearly $19K as Fed renews inflation warnings.
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🔸 Basel revises bank crypto capital plan to include blockchain.
🔸 JPMorgan says crypto market deleveraging cycle won’t be lengthy.
— Harsh.eth/lens/sol/elrond/near (@designerhv) July 1, 2022
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