Should Bitcoin Fear The FED Speech?

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Last Updated on 26 August 2020 by CryptoTips.eu

Jeroen Kok

Jeroen is one of the lead copywriters on Cryptotips.eu and discusses all recent events in the crypto market. This includes news updates, but also price analyzes and more. He developed his passion for cryptocurrency during the bull run in 2017. He has learned a lot since then. The combination of cryptocurrency and creative writing is perfect for Jeroen and an excellent way to share his knowledge with a wide audience. Find me on LinkedIn / jeroen@cryptotips.eu
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Jackson Hole is a small town in Wyoming, USA, where nothing ever happens, except for skiing in winter.

Once a year the town of 10,000 becomes the center of the universe as the world’s central bankers meet there to give the markets their vision on economic growth, inflation and all else that matters.

Given the dollar’s current weakness and the uncertainty as to the outcome of the US presidential election, many are wondering what Jerome Powell, President of the US Federal Reserve will say.

Furthermore, crypto analysts are fearful that he could have quite the impact on Bitcoin. Media such as Cointelegraph, Coindesk and Fortune have all highlighted the fact that Bitcoin’s current price growth run is dependent on what Powell says. Fortune’s most important crypto analyst, Billy Bambrough, entitled his piece: Bitcoin Braced For An Inflation Bombshell, which is not very promising.

CNBC has put a countdown clock on it’s website, showing the importance of the speech for the US dollar.

YouTube video

Let’s have a closer look.

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Inflation or no inflation

For weeks now, the US dollar has been in the doldrums, performing very weakly when compared to other global currencies like the Euro and the British Pound. Safe haven investments like Gold and Bitcoin have flourished as a result.

Many claim that the dollar’s weakness is due to several reasons: the US’s handling of the COVID-19 pandemic, the uncertain outcome of the US election in November, and the lack of Republicans and Democrats to find an agreement on further stimulus for Americans out of work.

Because of this, people are now wondering whether the US Federal Reserve will, in absence of politicians doing so, throw a lifeline to Americans out of work and help them by pumping additional money and turning on the printers even more. However, inflation would rise even higher.

Per Omkar Godbole of media outlet CoinDesk said it best:

Bitcoin has witnessed bigger year-to-date gains in the U.S. dollar terms, compared to the rally seen in terms of other currencies like the euro and the Japanese yen, which suggests that bitcoin’s recent rally has been primarily fueled by the broad-based sell-off in the dollar.

Whatever may happen, most economical analysts of crypto markets agree that the US dollar is likely to know a short term uptick after the Fed’s speech, which would be bad news for Bitcoin.

Even Anthony Pompliano, the known crypto and Bitcoin bull stated in his daily newsletter that he was:

Concerned about the road we are heading down.

Let’s wait and see what happens in Wyoming tomorrow.