Powell’s Jackson Hole speech leaves crypto investors in a tough spot
The crypto market faced heavy losses on Saturday and Sunday after Federal Reserve (Fed) Chairman Jerome Powell signaled that they may continue to raise interest rates sharply in the coming months. The crypto market cap fell below $1 trillion after hovering above the mark for over a month.
“While higher interest rates, lower growth and softer labor market conditions will bring down inflation, they will also cause some pain for households and businesses. These are the unfortunate costs of reducing inflation. But a failure to restore price stability will mean far greater pain, Powell said at the Jackson Hole Economic Symposium.
The global stock markets reacted strongly to the announcement, but the effect was more pronounced in the crypto market. The total market capitalization of all cryptocurrencies fell more than $50 billion from $1.04 trillion on August 26 to $953 billion on Monday, according to data from coinmarketcap.com.
Bitcoin, the largest cryptocurrency by market capitalization, fell below $20,000. Starting at. At 1pm on Monday it was trading at $19,887. On August 26, it peaked at $21,800 before closing at $20,199.
Ethereum, the second largest cryptocurrency, was at $1,453 on Monday. Before Powell’s speech on Friday, it was trading at $1,689, market data showed.
Solana and Avalanche, other major cryptocurrencies, were down 13 and 20 percent respectively in the last seven days.
However, the market dominance of Bitcoin has remained constant. It continues to hold over 39 percent share in the total crypto market. Ethereum has almost 19 percent of the total market share.
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