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Bitcoin Today 12/19/2024: Powell’s ‘mistaken’ speech causes market correction
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The United States Federal Reserve (Fed) cut interest rate by 25 basis pointsbut this did not bring gains to cryptocurrencies. In fact, the interest rate cut helped strengthen the dollar, which caused a sharp drop in risk assets.
According to CoinGecko, the Bitcoin (BTC) recorded a 2% drop this Thursday (19) and Ethereum (ETH) fell almost 5%. Of the Top 10 cryptocurrencies, the biggest falls were with XRP and Dogecoin (DOGE), which opened the day with losses of 6.4% and 6.1%, respectively.
In the Top 100, only seven cryptocurrencies registered appreciation, with the Bitget token (BGB) rising 9.6%the biggest gain of the day. On the other hand, memecoin FLOKI fell 13.4% and had the biggest loss of the day, with another memecoin (PEPE) falling more than 11%.
Meanwhile, the dollar strengthened around the world shortly after the Fed’s announcement. The DXY index rose by 1%, but retreated and closed the day with a slight drop of 0.27%. But in Brazil, the American currency renewed its historic high and closed Wednesday (18) worth R$6.24, after reaching R$6.30 during the trading session.
Who takes care of reservations?
In addition to the strengthening of the dollar, the speech by Jerome Powell, president of the Fed, also threw cold water on the markets. In his speech, Powell stated that the Fed would not be able to take care of Bitcoin reserves that the US government is willing to create.
However, in this regard the market reaction seems exaggerated. This is because, in fact, there is a confusion about the real role of the Fed.
The uncertainty in Jerome Powell’s speech undoubtedly disturbed cryptocurrency traders. Speaking about President-elect Donald Trump’s plans, Powell stated the Federal Reserve does not have the power to maintain such an asset in custody.
This speech ended up undermining confidence in the plan, which contributed to the market correction. However, sources linked to the government stated that It wouldn’t be the Fed’s responsibility store and manage BTC reserves.
This is because the This task is assigned to the Treasury Departmentwhich in the Trump administration will be in charge of Scott Bessent. The new secretary will be responsible for US financial reserves, including gold and likely Bitcoin. Therefore, it will not be up to the Fed to decide whether or not the US can establish this reserve.
While the Donald Trump administration has not shared a comprehensive plan for how it hopes to reach this reserve, there are moves in that direction. A leaked document provides details on how Trump may use an executive order to begin purchasing BTC before Congressional approval.
Bitcoin Today 12/19/2024: Powell’s ‘mistaken’ speech causes market correction
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Bitcoin Today 12/19/2024: Powell’s ‘mistaken’ speech causes market correction
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Bitcoin Today 12/19/2024: Powell’s ‘mistaken’ speech causes market correction
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Bitcoin Today 12/19/2024: Powell’s ‘mistaken’ speech causes market correction
