Bitcoin prices dropped at an alarming rate after the U.S Federal Reserve Bank chairman, Jerome Powell hinted that the bank may continue hiking interest rates.
Powell’s annual policy speech affirmed the bank chief’s resolve to cut down on inflation by any means, an act he dubbed “using our tools forcefully” to attack the all-time high inflation the country has witnessed in more than 40 years.
Although the country has witnessed four consecutive interest rate hikes totalling 2.25 percentage points, Powell argued the bank was in no way ready to stop or pause its continued interest hikes.
The remainder of the crypto market had immediately gone down following Powell’s comment.
The price of Ethereum, the second-largest digital asset, is currently about $1,500, down 10%.
This further led to a 4% 24-hour decline as the total value of the cryptocurrency market fell to $978 billion which caused the market worth to further drop by around $70 billion.
Powell had also noted the onset of inflation which will be heralded by higher interest rates, slower growth, and softer labour market conditions currently being introduced by the bank's new decision.
These decisions, he added, may also bring some pain to households and businesses while noting that those were the unfortunate costs of reducing inflation.
Apart from bitcoin prices, stocks fell after Powell’s speech, with the Dow Jones Industrial Average off more than 500 points. Treasury yields were off their highs of the session too.
Powell’s comment, however, has led to the strength of the dollar while other markets like the stock market have been hit very hard due to investors’ refusal to commit to risky investments.
Bitcoin and the larger crypto market have closely followed the stock market as investors holding digital assets have started trading them like tech stocks more lately,