The Federal Reserve, led by Chair Jerome Powell, recently made a 25-basis-point rate cut, bringing the fed funds rate to 4.5%-4.75%. This move was widely anticipated, but Powell's remarks on Bitcoin and potential rate cuts in 2025 sparked market volatility.
Key Takeaways:
- Interest Rate Cut: The Fed reduced the interest rate by 25 basis points, signaling a shift in monetary policy.
- Bitcoin Reserve: Powell stated that the Federal Reserve is not authorized to own Bitcoin and won't seek a law change, casting doubt on the feasibility of a national Bitcoin reserve.
- Market Reaction: The crypto market plummeted, with Bitcoin dropping 5%, and other cryptocurrencies like Ethereum and Solana falling up to 7%. Meme coins like Dogwifhat and Pepe suffered significant losses.
Potential Impact on Bitcoin:
- Short-term Volatility: Powell's remarks may trigger short-term price fluctuations in Bitcoin and other cryptocurrencies.
- Long-term Prospects: Some experts believe the market has overreacted, and a national Bitcoin reserve might not be imminent. Others think Bitcoin adoption will occur in other markets first, such as sovereign wealth funds in Asia or the Middle East.
Upcoming Events:
- May 8 Federal Reserve Announcement: Investors are eagerly awaiting the Fed's next move, which may impact Bitcoin's price and the overall crypto market. Keep an eye on Powell's speech for potential market-moving insights.