New comments from the Fed President drop BTC and ETH by 6%
New comment from Chairman Jerome Powell that officials should pause the bond buying program because of the COVID-19 omicron variation, causing BTC and ETH to both drop 6% as we can see on today’s Bitcoin news.
The market disruptions from a week ago have not subsided. Bitcoin and Ethereum fell 6% on Monday, according to Coinecko. Last week ended on news that Chinese real estate developers Evergrande and Kaisa missed their US dollar bond payments, crashing both the crypto market and the bond market. Analyst Alex Kruger says we will soon see the impact of performance fees, audits, wash sales and bonuses.
The main concern now, however, is whether the Federal Reserve will change its plans to slow the bundle purchase program, which ends in March instead of June. The impact of the Fed chairman’s new comments is evident in the crypto and traditional markets.
BTC has been down since Friday and is trading near $ 47,000, a 31% decrease from its previous high of $ 69,044. Ethereum, which traded near $ 4000 last weekend, lost ground over the weekend, trading at around $ 3800.
It looks worse with other coins in Prime 10. Solana’s SOL token is lagging 9% and Cardano’s ADA is down 7.5% from the previous day. Meanwhile, the global crypto market cap is at $ 2.26 trillion, down 5% on the previous day. Exchange-traded products tied to crypto assets like the Grayscale Bitcoin Trust and Ark Innovation fell 4% and 3%, respectively, earlier in the week. Traditional markets don’t do better either. The New York Stock Exchange Index is down 124 points from Friday’s closing price.
Until the end of last week, economists expected the Fed to gradually hike rates, ending prematurely its mortgage-backed bond-buying programs to support the economy. continue to be affected by COVID-19. Deutsche Bank even wrote:
“We expect the Fed to announce a doubling of the reduction agreement at the FOMC meeting in December, bringing monthly cuts to $ 20 billion and $ 10 billion per month for Treasuries and MBS, respectively.
If it had, the buying and selling would have ended in March instead of June, but there is now evidence that Fed officials are looking much more seriously at the Omicron variant virus than the Delta variant. Fed chief Jerome Powell wrote:
“The growing population’s concern about the virus could reduce people’s willingness to work in person, which will slow labor market progress and exacerbate supply chain disruptions.”