Bitcoin (BTC) faced a momentary setback on Friday as its value dipped below $26,000. This drop followed comments made by U.S. Federal Reserve Chair Jerome Powell regarding the possibility of the central bank raising interest rates. Powell made these remarks during a speech at a Federal Reserve-sponsored economic policy symposium in Jackson Hole, Wyoming.
During his speech, Powell acknowledged that the Fed has been enforcing significant policy restrictions over the past year. He further mentioned that the Fed might raise interest rates again to tackle inflation and bring it down to the central bank’s target of 2%. According to Powell, while inflation has decreased from its peak, it remains at a rate that is too high. Consequently, the Fed is willing to implement further rate hikes if deemed necessary.
In his address, Powell specifically highlighted core Personal Consumption Expenditures (PCE) inflation, which excludes food and energy components. He noted that this measure of inflation peaked at 5.4% in February 2022 before declining to 4.3% in July.
Following Powell’s remarks, Bitcoin experienced a temporary decline. However, it has since rebounded and is currently being traded at $26,078, representing a 0.39% decrease within the past 24 hours.
Investors are being cautioned to conduct thorough research and exercise caution before venturing into high-risk investments such as Bitcoin and other cryptocurrencies. The volatility of the crypto market, coupled with the potential regulatory changes, suggests the need for careful consideration and risk assessment before making any financial decisions.
As the cryptocurrency market continues to evolve and respond to various factors, it is crucial for investors to stay informed and stay tuned to the latest developments to mitigate potential risks and make well-informed investment choices.
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