In a dramatic turn of events, the cryptocurrency market experienced a massive liquidation of $310 million within just one hour. This sudden wave of sell-offs and massive liquidation in crypto market triggered the market volatility.
Powell’s Bitcoin Reserve Remarks Shake Crypto Market
Federal Reserve Chair Jerome Powell’s recent remarks have sparked unease among cryptocurrency investors. Speaking at a press conference after the Federal Open Market Committee meeting, Powell stated that the U.S. central bank has no plans to participate in any government initiative to hold massive amounts of Bitcoin.
“The Federal Reserve is not permitted to own Bitcoin,” Powell clarified, explaining that any legal adjustments to facilitate such actions would need Congressional approval. He dismissed speculation about the Federal Reserve advocating for changes to existing laws.
Powell’s comments came in response to discussions around the creation of a Strategic Bitcoin Reserve under the upcoming administration of President-elect Donald Trump.
Shortly after the speech, Bitcoin fell by as much as 5.3% to $100,680, after reaching an all-time high of $108,000 earlier in the week.
Adding to the pressure on cryptocurrencies, U.S. stocks experienced a major downturn on Wednesday. After initially rising, major indices erased gains after the Federal Reserve announced a 25-basis-point interest rate cut, bringing rates to the 4.25%-4.50% range.
In a nutshell, the combined impact of Powell’s Bitcoin reserve comments and the stock market crash has sent shockwaves through the cryptocurrency market.
Also Read: U.S. Bitcoin Reserve: What’s Inside the First Draft
