Bitcoin Tumbles Below $21K After Powell’s Hawkish Remarks

The Federal Reserve chair said households and businesses should prepare for pain as the central bank works to bring down inflation.

AccessTimeIconAug 26, 2022 at 4:30 p.m. UTC
Updated May 11, 2023 at 6:21 p.m. UTC
10 Years of Decentralizing the Future
May 29-31, 2024 - Austin, TexasThe biggest and most established global hub for everything crypto, blockchain and Web3.Register Now

Bitcoin (BTC) dropped almost 5% in value in the two hours following Federal Reserve Chair Jerome Powell’s long-awaited keynote address at the Fed's Jackson Hole, Wyoming, economic conference Friday morning. Equity markets slid with crypto, with the S&P 500 index down more than 2%.

“The stock market had not priced this in except the last couple of days and it’s because the risk was that they would be hawkish, not the belief,” Bob Iaccino, chief strategist at Path Trading Partners and co-portfolio manager at Stock Think Tank, told CoinDesk.

“[The market] is pricing it in now at least as much as it believes the Fed, but it's about Powell’s legacy and his credibility at this point,” he added. Iaccino further noted that markets had rallied ahead of the speech – perhaps anticipating more dovish remarks – thus likely exacerbating today’s decline.

From Powell’s address: “Reducing inflation is likely to require a sustained period of below-trend growth … While higher interest rates, slower growth and softer labor market conditions will bring down inflation, they will also bring some pain to households and businesses.”

The largest cryptocurrency by market capitalization, bitcoin initially showed little reaction to Powell’s remarks, but has now turned sharply lower – to the current $20,700 from just shy of $22,000 ahead of the speech.

In addition to the S&P 500’s 2.15% decline, the Nasdaq is lower by 2.7% and the Dow Jones Industrial Average by 1.8%.

Disclosure

Please note that our privacy policy, terms of use, cookies, and do not sell my personal information has been updated.

CoinDesk is an award-winning media outlet that covers the cryptocurrency industry. Its journalists abide by a strict set of editorial policies. In November 2023, CoinDesk was acquired by the Bullish group, owner of Bullish, a regulated, digital assets exchange. The Bullish group is majority-owned by Block.one; both companies have interests in a variety of blockchain and digital asset businesses and significant holdings of digital assets, including bitcoin. CoinDesk operates as an independent subsidiary with an editorial committee to protect journalistic independence. CoinDesk offers all employees above a certain salary threshold, including journalists, stock options in the Bullish group as part of their compensation.

Helene Braun

Helene is a New York-based reporter covering Wall Street, the rise of the spot bitcoin ETFs and crypto exchanges. She is also the co-host of CoinDesk's Markets Daily show. Helene is a graduate of New York University's business and economic reporting program and has appeared on CBS News, YahooFinance and Nasdaq TradeTalks. She holds BTC and ETH.


Learn more about Consensus 2024, CoinDesk's longest-running and most influential event that brings together all sides of crypto, blockchain and Web3. Head to consensus.coindesk.com to register and buy your pass now.