The cryptocurrency, the largest by market capitalization, has been hit this year by a massive market selloff and a booming global economy. Now trading up 70% from its November 2021 all-time high of $69,044.77.
Ethereum, followed by the second largest digital asset, is selling at $1,584.82 at the time of this writing.
The US Fed has been raising interest rates several times this year to curb inflation, which is currently at a four-decade high.
The Federal Reserve Bank of Kansas City hosted dozens of central bankers, policymakers, academics and economists at its annual Economic Policy Symposium in Jackson Hole. It took place to reassess the constraints on the economy and politics.
Powell, speaking there on Thursday, said he would keep his speech short and focused, saying, “Most likely, some labor market conditions will soften.” While higher interest rates, slower growth and soft labor market conditions will keep inflation down, they will also cause some pain for households and businesses. These are the unfortunate costs of deflation. But the failure to restore price stability will cause more pain.
Global stock markets reacted strongly to the announcement, but the impact was more pronounced on the crypto market. Solana and Avalanche, other major cryptocurrencies, also fell by 13 and 20 percent in the past seven days.
Bitcoin’s market dominance, however, has remained constant. It continues to hold more than 39 percent share in the total crypto market, with Ethereum accounting for 19 percent of the total market share.