Today could prove to be a pivotal day for bitcoin price. Today is the time for Federal Reserve Chairman Jerome Powell to speak at the Jackson Hole Economic Symposium; an annual event considered the premier event for central bankers.
But to what extent can we actually take Jerome Powell’s statements seriously?
Is today crucial for bitcoin?
On paper, Jerome Powell’s speech, scheduled for 4:05 p.m. Dutch time, is crucial for the Bitcoin price. In this speech, the Federal Reserve Chairman will shed light on the state of the world economy and his central bank’s strategy.
However, we should not forget that central bankers (at least in the media) are not the best predictors of the future. Jerome Powell and his Federal Reserve, for example, predicted almost two years ago that inflation would be a temporary phenomenon.
We now know that inflation was anything but a temporary phenomenon. In fact, it took us the most aggressive interest rate campaign in Fed history to get it under control; and the final target of an inflation rate of 2.0 percent has still not been reached.
In this respect, it remains to be seen to what extent the market will take the statements by US Federal Reserve Chairman Jerome Powell seriously today. Chances are that Powell will deliver a fairly neutral speech today, leaving his central bank with all options open.
What does this mean for the Bitcoin price?
The fact that we’re unlikely to hear anything interesting from Federal Reserve Chairman Jerome Powell doesn’t mean it can’t impact bitcoin price. Last year, for example, bitcoin price fell below $20,000 after Powell’s Jackson Hole speech.
In this regard, we should prepare for a day when volatility cannot be ruled out. Sentiment isn’t great right now, so there’s a chance that a stern speech from Powell could push the price down yet again.
If Powell unexpectedly talks about rate cuts today, it could well result in a huge spike in the price of bitcoin. Especially since the mood is so negative at the moment.