Bitcoin trades flat this Thursday, about $33,000, after the testimony of Federal Reserve (Fed) Chairman Jerome Powell, before the Congressional Financial Services Committee, kicked off a rally on Wall Street that led the S&P 500 to a new intraday high. Experts say that cryptocurrencies, which added up to two days of declines until yesterday, were carried away by the joy of investors to overcome to some extent the falls with which dawned on Wednesday.
All in all, bitcoin continues to flirt with the bottom of the trading range in which it has been encapsulated for eight weeks and which ranges from $30,000 to $40,000, although it has been narrowing its movement between 31,000 and 34,000 dollars this July. Ethereum, on the other hand, fails to recover the 2,000 dollars, although it rises more than 4% and the rest of the market is dyed green. Total capitalization, however, barely exceeds $1.3 trillion.
Without much news in the cryptocurrency market to encourage the price, analysts say that the purchases are the result of the contagion of advances in traditional assets by Powell’s assurances that he is not yet seeing a “substantial additional progress” in economic recovery. This indicates that the U.S. central bank is unlikely to reduce monetary stimulus in the short term.
“What helped cryptocurrencies turn positive was wall street’s broad rally,” says Edward Moya, senior market strategist at Oanda. “The Fed seems stubbornly ‘dovish’ and is willing to tolerate a few more months of rising price pressures before considering a change of tune on the transitory/persistent inflation debate.”
In fact, traders were kind of going through the Fed chairman’s comments on cryptoassets. specifically referred to stablecoins, on which he said there are potential risks and require regulation to ensure their safety. Specifically, he noted that they are very similar to money market funds or bank deposits “but without regulation.”
“We have a tradition in this country where public money is kept in what is supposed to be a very safe asset. We have a fairly strong regulatory framework around bank deposits, for example, or money market funds. That doesn’t really exist for stablecoins,” he said during his semi-annual testimony on the U.S. economy.
Not even the negative news coming from China in their crusade against cryptocurrency mining they have been a shock to a market that has already become accustomed to living with a dose of fear coming from the actions of the Asian giant. Anhui province on Wednesday became the latest to pledge crackdown on the practice of using energy-intensive machines to mint bitcoins and other virtual currencies. It plans to close all cryptocurrency mining projects in the next three years due to power supply shortages, hf365.com reported.
This summer cryptocurrencies snizzy keeps experts in tension, while waiting for the liquidation of the Grayscale Bitcoin Trust shares or Ethereum Update London they serve as a catalyst for some action in digital assets.