Today will be a highly volatile Friday for bitcoin
The speech by Jerome Powell, chairman of the FED, will have a positive or negative impact on financial markets, including cryptocurrencies.
The Jackson Hole economic symposium, which concludes tomorrow, keeps investors on edge ahead of Jerome Powell's speech, chairman of the United States Federal Reserve (FED).
His intervention, scheduled for today, Friday, August 22 at 10 a.m. (Eastern Time), generates expectations about possible signals regarding the future of interest rates, a factor that has influenced the recent fluctuation in the price of bitcoin (BTC).
The currency reached an all-time high of $124,000 last week but failed to hold and fell to $112,000, reflecting market uncertainty.
In this context, Powell could provide clues on whether the FED plans to cut interest rates, currently in a range of 4.25% to 4.5%, as part of its strategy to control inflation.
Last year, at the same event, Powell announced that the FED was close to reducing rates after a period of increases to counteract the inflation generated by the pandemic. A similar indication today could encourage investors, as lower interest rates reduce borrowing costs, incentivizing investment in assets considered 'risky' such as bitcoin and other cryptocurrencies, which typically boosts their demand and price.
However, not everyone is optimistic. Tom di Galoma, managing director of Mischler Financial Group, warns that Powell could adopt a cautious tone, avoiding committing to immediate cuts. To maintain flexibility, the FED chairman could condition any decision in September on the upcoming employment and inflation reports, which will be released at the beginning of next month.
