Bitcoin Sheds 5% over Fed’s Chairman Dovish Talk
Bitcoins Price falls by about 5% Thursday after the United States Federal Reserve Chairman Jerome Powell’s dovish talk amidst rising bond yields.
With the growing acceptance, Bitcoin price has maintained an uptrend but it appears the crypto-asset is doing some sort of pendulum movement in recent times.
It took Citi’s tipping point report on the asset to reverse the 7-day loss on Sunday having plunged to $43,000 after Coinbase warn that the coin will lose significant value if its originator(s) reveal identity(s) or sell stakes.
It would be recalled that Bitcoin prices had quadrupled last year with addition of a 66% uptrend in 2021 on speculation the cryptocurrency could serve as an inflation hedge.
Bitcoin (BTC (-4.72%)) trading around $48,204 after declining 4.5% over the previous 24 hours.
The leading cryptocurrency asset price fell by the most in a week after U.S. Federal Reserve Chair Jerome Powell acknowledged he “would be concerned” by tightening financial conditions because rising U.S. government-bond yields put upward pressure on borrowing costs.
Analysts said the comments might signal more hesitation in providing fresh monetary stimulus. Bitcoin changed hands at around $48,204, down about 4.5% over the past 24 hours.
Powell said in a question-and-answer session with the Wall Street Journal he doesn’t expect higher inflation to persist and that the central bank is still “a long way from our goals” of an economic recovery and lower unemployment.
The yield on the 10-year U.S. Treasury note climbed on Thursday above 1.5% as disappointment spread among some traders in traditional markets who had bet the Fed might provide specifics on how to tamp down long-term interest rates, according to Bloomberg News.
For Bitcoin traders who have been betting the cryptocurrency’s price is a good hedge against potential currency debasement, Powell’s comments offered few signs the Fed plans new dovish actions.
Such moves might include expanding the U.S. central bank’s $120 billion-a-month bond-purchasing program.
“Powell did not deliver,” the cryptocurrency trader Alex Kruger tweeted. “Basically repeated his usual dovish lines.”
Stocks were lower on Thursday, also potentially reflecting dimmed expectations of more stimulus that might boost the equities market.
Meanwhile, Ether, the second-largest cryptocurrency by market value, fell by 2.5% to $1,528.
For the past week, prices have remained in a narrow range between roughly $1,420 and $1,570.
Market data indicates that the cryptocurrency asset is still well off its all-time-high price around $2,036.
With leading tech companies such as PayPal and Tesla embracing Bitcoin, industry observers are looking to Apple as the next major firm to step into crypto.
Market analysts think it is too quick to predict Apple will be willing to add Bitcoin to its balance sheet.
Apple, the world’s largest company by market capitalization, has remained relatively neutral on Bitcoin over the years.
This has been the situation despite a growing number of its leading competitors making various forays into the cryptocurrency and Blockchain space.
Google has partnered with multiple crypto-focused companies, become an enterprise network validator for Theta, a decentralized video streaming crypto project, and more recently added a dedicated “crypto” data tab to its finance page.
Also, Microsoft launched an Identity Overlay Network (ION) built on the Bitcoin Blockchain and filed a patent in 2020 for a crypto mining system powered by human activity.
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In the same way, Facebook famously announced its controversial Libra cryptocurrency in 2019 (it is now known as Diem and is expected to be released sometime in 2021).
Just as Amazon is planning to launch its own cryptocurrency project and recently announced its managed Blockchain now supports Ethereum.
In 2017, Amazon Technologies also purchased a number of cryptocurrency and Ethereum-centered domain names.
Tesla CEO and self-proclaimed dogecoin fan, Elon Musk, recently showcased his support for Bitcoin by purchasing $1.5 billion worth as part of a new investment policy for his electric car company. Read Also: Premium Trust Bank Opens for Operation in Nigeria
The announcement sent the crypto market skyrocketing by more than $90 billion and raised hopes that other companies.
Bitcoin Sheds 5% over Fed’s Chairman Dovish Talk
