Bitcoin’s price dropped after the Federal Reserve Chairman hinted at more interest rate cuts. This is surprising because Bitcoin typically rises when interest rates decrease.
Many expected Bitcoin to increase in value after Powell’s speech, but it didn’t. This has caused people to wonder why.
Bitcoin’s Past Performance
In the past, Bitcoin’s price has increased when interest rates have been lowered. This happened after the Fed announced the first rate cut in several years. However, Bitcoin’s price then fell before the actual rate cut.
After the rate cut, Bitcoin’s price rose again. But it has since fallen.
Powell’s Recent Speech
Powell recently suggested that the Fed will likely cut interest rates twice more this year. This is good news for riskier assets like Bitcoin.
Despite this positive news, Bitcoin’s price has fallen. Some experts had warned that Bitcoin’s price might drop after the rate cut.
But BTC Dropped?
While this sounds like promising news for riskier assets like BTC, the cryptocurrency couldn’t mimic its previous performance and failed to produce any substantial gains. Just the opposite, it’s down by over 2% over the past 24 hours and now trades at a multi-day low of $62,500 after it was rejected at $64,000 earlier today.
Recall that a few industry experts warned about potential price calamities for BTC after the Fed’s rate reduction. First, it was Arthur Hayes who said the rate cut could ‘cripple’ the crypto market, especially in the short term.
The research department at Bitfinex went further, indicating that BTC’s price could tumble to $45,000 after the Fed’s pivot.