Market Wrap: Bitcoin Falls to $48K as Fed's Powell Makes No New Promises; Ether Drops
Bitcoin prices quadrupled last year and have rallied 66% this year on speculation the cryptocurrency could serve as an inflation hedge.
Bitcoin's 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.
The comments might signal more hesitation in providing fresh monetary stimulus. Bitcoin prices quadrupled last year and have rallied 66% this year on speculation the cryptocurrency could serve as an inflation hedge in the face of trillions of dollars of money printing by central banks around the world.
As of press time, bitcoin was changing hands 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.
Ether falls with bitcoin
For the past week, prices have remained in a narrow range between roughly $1,420 and $1,570.
The cryptocurrency is still well off its all-time-high price around $2,036.
Digital assets on the CoinDesk 20 are mostly green Tuesday. Notable winners as of 21:15 UTC (4:15 p.m. ET):
- kyber network (KNC) + 4.0%
- S&P 500 -1.3%
- FTSE 100 -0.4%
- Nikkei 225 -2.1%
- U.S. Treasury 10-year yield +0.054 percentage point to 1.55%
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