jerome powell

Bitcoin price hits $39K as Powell stirs bets Fed rate hikes are over

Bitcoin reaches levels not seen since May 2022 amid an excited market reaction to the latest Fed inflation commentary.

Bitcoin (BTC) hit $39,000 for the first time since mid-2022 on Dec.

*BTC/USD 1-hour chart. Source: TradingView*

Powell: Calling end to hikes would be “premature”

Data from Cointelegraph Markets Pro and TradingView confirmed a new 19-month BTC price high of $39,000 on Bitstamp.

Bitcoin bulls, already in a strong position, beat out resistance as Fed Chair Jerome Powell took to the stage at Spelman College in Atlanta, Georgia for a scheduled appearance.

“The FOMC is strongly committed to bringing inflation down to 2% over time and to keeping policy restrictive until we’re confident that inflation is on a path to that objective,” he said in prepared remarks.

“It would be premature to conclude with confidence that we have achieved a sufficiently restrictive stance, or to speculate on when policy might ease.”

While keeping his tone cautious, Powell appeared to boost risk asset sentiment with his comments on the current state of the U.S.

Reacting, financial commentary resource The Kobeissi Letter was among those with a more sober take on what the Fed might do in the future.

“Their narrative has not changed since last year, but markets continue to call for a Fed pivot,” it wrote in part of a post on X (formerly Twitter).

“As we have stated before, the Fed would rather spark a mild recession than risk a resurgence of inflation.

Read more

‘How did this happen’ — Powell says Fed stumped over the collapse of SVB

In a post-FOMC meeting on March 22, the chairman of the Federal Reserve said his “only interest is that we identify what went wrong here.”

United States Federal Reserve Chairman Jerome Powell has conceded that his regulator was blindsided by the sudden collapse of Silicon Valley Bank, despite it being under their watch.

In a press conference held just after the Federal Open Market Committee meeting on March 22, Powell said he immediately knew there was a need for an internal investigation when the bank shut down on March 10, stating:

“I realized right away that there was going to be a need for a review. I mean, the question we were all asking ourselves over that first weekend was, ‘how did this happen?’”

The Federal Reserve on March 13 announced the launch of an internal investigation led by Vice Chairman Michael Barr to look into the events surrounding the failure of SVB and how the Fed “supervised and regulated” the bank.

Powell confirmed that Barr will be testifying next week.

“We’re doing the review of supervision and regulation,” Powell said. “My only interest is that we identify what went wrong here,” he added.

*Federal Reserve Chairman Jerome Powell speaking at a Federal Open Market Committee conference on March 22. Source:* *Federal Reserve*

SVB’s collapse has been linked to the Federal Reserve’s successive interest rate hikes that have been aimed at taming inflation. This is understood to have eroded SVB’s long-term bonds it purchased at near-zero rates.

When SVB announced that it suffered a $1.8 billion after-tax loss and was looking to raise $2.25 billion, the market panicked, leading to a $160 billion wipeout in its market cap in 24 hours.

*The share price of SVB Financial Group fell nearly 60% on March 10. Source:* *Yahoo Finance*

At the time, despite SVB CEO Greg Becker urging investors to “stay calm” and not to “panic”, depositors began to request withdrawals from SVB en masse, causing a bank run.

On March 10, the United States Federal Deposit Insurance Commission stepped in, taking possession of SVB to help depositors get access to their money. Emergency measures were put in place by the government soon after to guarantee all deposits at SVB.

Powell’s latest comments on SVB come as the Federal Reserve Board announced that it will increase interest rates by 25 basis points.

The news has U.S. Senator Elizabeth Warren frustrated with Powell, who has now raised interest rates nine consecutive times to 5%.

“I think he’s a dangerous man to have in this job,” she said, in a March 22 interview on CNN.

“We’ve never seen hikes at this rate in the modern economy,” she said, adding that it risks “pushing our economy into a recession.”

Warren believes the effects of Powell’s “weak” regulatory approach toward large banks in the U.S. over the last five years is another factor to blame for the recent banking crisis:

“I predicted five years ago the consequence of that kind of weakening would be that we see these banks load up on risk, build their short term profits, give themselves ginormous bonuses and big salaries and then some of those banks would explode.”

“That is exactly what has happened on Jerome Powell’s watch,” Warren added.

Federal Reserve confirms July launch for FedNow instant payment service

The FedNow service aims to reduce the gap in payment time between United States financial institutions.

The United States Federal Reserve has confirmed a July launch date for its long-awaited instant payments system, seen by some as an alternative to central bank digital currencies and stablecoins.

The instant payment network will settle payments in seconds and can support transactions between consumers, merchants and banks. It does not rely on blockchain technology.

It’s a significant step for the government, as it is controlled by the Federal Reserve. Clearing House’s RTP network, which also offers real-time payments, is operated by a consortium of large banks.

@federalreserve @frbservices announce July launch for the FedNow Service: https://t.co/a7kPqxkS7Q

— Federal Reserve (@federalreserve) March 15, 2023

According to a March 15 announcement, the U.S. Fed said the debut of FedNow is set for July, with the U.S. Treasury and a “diverse mix of financial institutions of all sizes” ready to use the network from launch.

The Fed said it will “begin the formal certification of participants” during the first week of April in preparation for the launch.

“Early adopters will complete a customer testing and certification program, informed by feedback from the FedNow Pilot Program, to prepare for sending live transactions through the system,” the announcement reads.

FedNow was announced in 2019 and will provide round-the-clock, real-time gross settlement by funneling commercial bank money from a sender through a Fed credit account to its recipient. It also has built in features such as fraud risk management.

if you like bank runs in the age of social media you’re going to love bank runs in the age of fednow

— nic carter (@nic__carter) March 12, 2023

Following the official launch, the Federal Reserve outlined that it will push to onboard as many as financial institutions as possible in order to increase the availability of instant payments.

“The launch reflects an important milestone in the journey to help financial institutions serve customer needs for instant payments to better support nearly every aspect of our economy,” Tom Barkin, president of the Federal Reserve Bank of Richmond and FedNow Program executive sponsor, said in the announcement.

Some see the FedNow service as tackling a problem that both stablecoins and CBDCs also seek to solve.

The FedNow program, however, doesn’t use blockchain tech, while the Federal Reserve is known to have a cautious and skeptical view on stablecoins.

*Tweet from Meltem Demirors on FedNow. Source: Twitter*

One of the major banking payment rails servicing U.S. crypto companies in the Silvergate Exchange Network (SEN) was shut down earlier this month following Silvergate’s collapse.

As it stands, SEN competitor SigNet from Signature Bank is still operational despite the bank’s forced closure on March 13. However, its fate is up in the air, while a number of companies have reportedly fled from the network following Signature’s troubles.

Exactly.

Silverbank had Silvergate Exchange Network.
Signature had Signet.

Both were private networks for companies to transfer value between each other using digital assets. Where are both now?

These companies enabled alternative currencies that threaten a CBDC and FedNow.

— Damon Nam (@damonnam) March 15, 2023

FedNow could also stand in place of a central-bank-issued digital currency.

Federal Reserve Vice Chair Lael Brainard emphasized during a House of Representatives Committee on Financial Services hearing in May that a CBDC would take far longer to get off the ground than FedNow due to regulatory hurdles.

“[If] Congress were to decide… to issue a central bank digital currency, it could take five years to put in place the requisite security features, the design features,” she said.

She added that FedNow will serve many of the same functions as a CBDC anyhow.

Fed chair Jerome Powell also spoke before the House Financial Services Committee on March 9 and suggested that a potential U.S. CBDC is still quite some time away.

“We’re not at the stage of making any real decisions,” he said, adding that “what we’re doing is experimenting in kind of early stage experimentation. How would this work? Does it work? What’s the best technology? What’s the most efficient?”

Commenting on FedNow, however, he stated that “we’ll have real-time payments in this country very, very soon.”

Bitcoin bulls stumble at $23.4K as Fed’s ‘disinflation’ sparks BTC price rally

Bitcoin price action returns to tackle familiar resistance, with bulls failing to make fresh inroads toward $25,000.

Bitcoin (BTC) rebounded to key resistance on Feb. 8 as crypto markets got a boost from a familiar source.

*BTC/USD 1-hour candle chart (Bitstamp). Source: TradingView*

Powell: “Disinflationary process” is here

Data from Cointelegraph Markets Pro and TradingView showed BTC/USD reaching the important $23,400 zone on Bitstamp overnight.

The pair reacted positively to the latest comments from the United States Federal Reserve, which also sent equities higher during the Feb. 7 Wall Street trading session.

Fed Chair Jerome Powell again mentioned “disinflation” during his appearance, reinforcing market hopes that interest rate hikes could cool more quickly in line with inflation. These stemmed from the latest meeting of the Federal Open Market Committee (FOMC) on Feb. 1, where the Fed raised rates by 0.25%.

“The message that we were sending at the FOMC meeting last Wednesday was really that the disinflationary process — the process of getting inflation down — has begun, and it’s begun in the goods sector, which is about a quarter of our economy,” he said at The Economic Club of Washington, D.C.

Powell nonetheless cautioned that there was “a long way to go” and that the U.S. was in “the very early stages of disinflation.”

Despite this, risk assets rallied into the Wall Street close, with the S&P 500 and Nasdaq Composite Index finishing up 1.3% and 1.9%, respectively.

Bitcoin also erased previous weakness, having dropped below $22,700 earlier in the week, but bulls proved unable to tackle ask liquidity at $23,400 and beyond.

That liquidity remained in place on the day, as visible in data covering the Binance order book supplied by on-chain monitoring resource Material Indicators.

*BTC/USD order book data (Binance). Source: Material Indicators/ Twitter*

“Markets rallied into the close yesterday, with Bitcoin’s last H4 candle showing weakness at resistance & printing a shooting star,” popular trader Mark Cullen summarized about the latest events.

“I personally am still waiting for the lows to get swept. BUT if the BTC can close a H$ above 23.4k I will look for a push higher.”

Crucial area held for #Bitcoin, so we should be seeking for continuation.

Gameplan is simple;
– Crack $23.3K and we’ll see new highs, correction is over.

– Lose $22.6K and I’ll be seeking $21.5-21.7K for longs on #Bitcoin. pic.twitter.com/xJp6iSbeQb

— Michaël van de Poppe (@CryptoMichNL) February 8, 2023

Michaël van de Poppe, founder and CEO of trading firm Eight, was also encouraged by Bitcoin’s reaction. A flip of $23,300 to a more solid support, he told Twitter followers on the day, would mean that the latest BTC price correction “is over.”

BTC/USD traded at around $23,200 at the time of writing, with traders still counting down to volatility returning.

Golden cross vs. death cross to resolve in a “few days”

Looking ahead, the rest of the week held little by way of important macroeconomic cues for crypto markets.

As Cointelegraph reported, eyes were already on next week’s inflation data, coming in the form of the Consumer Price Index (CPI) print for January.

At the same time, chart analysts hoped for a positive outcome from Bitcoin’s latest “golden cross” on the daily chart — its first since September 2021. At the same time, however, BTC/USD weekly timeframes continued to print a “death cross,” a phenomenon which often preceded further downside in the past.

“Many say Death Cross/Golden Cross Lagging Indicator. It is Lagging for those who only think Golden Cross means Bullish, and Death Cross means Bearish. I use this indicator to understand Momentum,” fellow trader Jibon wrote in part of a dedicated Twitter thread on the topic on Feb. 7.

Jibon compared the current setup to previous instances in 2015 and 2019 and added that it would take a “few days” for the impact of the crosses to become more obvious.

*BTC/USD comparative charts. Source: Trader_J/ Twitter*

The views, thoughts and opinions expressed here are the authors’ alone and do not necessarily reflect or represent the views and opinions of Cointelegraph.

Bitcoin spikes above $24K as Fed chair Powell talks of ‘disinflation’

While the rate increase was expected by the markets and Jerome Powell indicated more increases will come, the market has reacted positively to the Fed chairman’s comments.

The price of Bitcoin (BTC) broke through the $24,000 ceiling and the total crypto market cap jumped nearly 4% after United States Federal Reserve Chair Jerome Powell indicated that inflation had begun slowing down in the world’s largest economy.

“We can now say, I think for the first time, that the disinflationary process has started […] we see it really in goods prices,” said Powell during a Feb. 1 Federal Open Market Committee press briefing shortly after announcing an interest rate hike of 25 basis points.

The rate hike and Powell’s remarks appeared to have gone down well in the crypto markets, which had been trading sideways in the lead-up to the speech but saw market cap increase by over $40 billion in the hours after the announcement.

*Cryptocurrency market capitalization from Feb. 1 to Feb. 2. Source: CoinMarketCap*

The global crypto market cap is now at $1.09 trillion, up 3.88% over the last day, according to the latest figures from Coinmarketcap.

Meanwhile, BTC tipped slightly over $24,000 for the first time in 2023, reaching $24,161.27 according to Coinmarketcap.

That being said, Powell said they still expect inflation to continue rising in the services sector for some time and to be prepared for “ongoing rate rises.”

“We see ourselves as having more persistent inflation in that [services] sector, which will take longer to get down, and we have to complete the job. That’s what we’re here for.”

Powell noted that “ongoing rate rises” would still be appropriate as the Federal Reserve attempts to bring inflation back to its 2% target level.

It should be noted that disinflation refers to a slowdown in the rate of increase of general price levels, as opposed to deflation, where the general price level of goods and services decreases.

Bitcoin price targets include new $14K dip as Fed’s Powell avoids inflation

No fresh BTC price catalyst from the Fed as Chair Powell fails to mention inflation altogether.

Bitcoin (BTC) traders faced disappointment at the Jan. 10 Wall Street open after the United States Federal Reserve declined to comment on future policy.

Powell keeps quiet on Fed policy

Data from Cointelegraph Markets Pro and TradingView followed BTC/USD as it stayed flat at around $17,250 on Bitstamp.

Hopes had focused on a fresh BTC price catalyst courtesy of the Fed in the form of a speech by Chair Jerome Powell.

Speaking at the International Symposium on Central Bank Independence at Sweden’s Central Bank headquarters in Stockholm, however, Powell avoided the topic of U.S. monetary policy altogether.

“I will address three main points. First, the Federal Reserve’s monetary policy independence is an important and broadly supported institutional arrangement that has served the American public well,” he began.

“Second, the Fed must continuously earn that independence by using our tools to achieve our assigned goals of maximum employment and price stability, and by providing transparency to facilitate understanding and effective oversight by the public and their elected representatives in Congress. Third, we should ‘stick to our knitting’ and not wander off to pursue perceived social benefits that are not tightly linked to our statutory goals and authorities.”

The latter point referred to the Fed implicating itself in the climate change debate.

In the absence of market triggers, neither crypto nor U.S. stocks were especially promising in the first hour’s trading on Wall Street.

In fresh analysis on the day, Filbfilb, co-founder of trading suite Decentrader, outlined potential upside and downside targets for BTC price action in the short term.

Volatility, as Cointelegraph reported, was still expected on Jan. 12 with the release of Consumer Price Index (CPI) data for December.

“Buyers have been found for 2 months below 16.5k,” he told Telegram channel subscribers, highlighting several weekly moving averages (WMAs) to bear in mind.

“20 WMA sits around 18.3k which is also the current range high, previous support, and diag resistance. If it breaks that key level, the top of the wedge would be the target, also the 200 WMA c.$24k.”

Should bearish tendencies return, meanwhile, a trip to as low as $14,000 remained possible.

“Liquidity shows that it might be a bit of a battle to make it up to 24k,” Filbfilb continued.

“If there is a curveball thrown into the mix, there is fuel in the tank to take us to 14-14.5k.”

*BTC/USDT annotated chart. Source: Filbfilb/ TradingView*

Winklevoss accuses GBTC CEO Silbert of fraud

Elsewhere, tensions involving crypto conglomerate Digital Currency Group (DCG) continued to fester on the day.

Cameron Winklevoss, co-founder of exchange Gemini, followed up on an open letter to DCG CEO, Barry Silbert, accusing him of fraud and calling on the firm’s board to dismiss him.

The debacle, part of the global fallout from the collapse of FTX, focuses on locked customer funds and SIlbert’s alleged unwillingness to cooperate with creditors’ demands.

A separate effort, “Redeem GBTC,” seeks to gain access to funds on behalf of investors in the Grayscale Bitcoin Trust (GBTC), the largest Bitcoin institutional investment vehicle, with over $10 billion in assets under management.

Its creator, crypto entrepreneur David Bailey, has informally pledged to expand the grassroots campaign’s scope to include other crypto funds operated by Grayscale, which in turn is a subsidiary of GBTC.

The event, as before, nonetheless failed to produce noticeable price pressure on Bitcoin itself.

The views, thoughts and opinions expressed here are the authors’ alone and do not necessarily reflect or represent the views and opinions of Cointelegraph.

Bitcoin price targets include new $14K dip as Fed’s Powell avoids inflation

No fresh BTC price catalyst from the Fed as Chair Jerome Powell fails to mention inflation altogether.

Bitcoin (BTC) traders faced disappointment at the Jan. 10 Wall Street open after the United States Federal Reserve declined to comment on future policy.

Powell keeps quiet on Fed policy

Data from Cointelegraph Markets Pro and TradingView followed BTC/USD as it stayed flat at around $17,250 on Bitstamp.

Hopes had focused on a fresh BTC price catalyst courtesy of the Fed in the form of a speech by Chair Jerome Powell.

Speaking at the International Symposium on Central Bank Independence at Sweden’s Central Bank headquarters in Stockholm, however, Powell avoided the topic of U.S. monetary policy altogether.

“Second, the Fed must continuously earn that independence by using our tools to achieve our assigned goals of maximum employment and price stability, and by providing transparency to facilitate understanding and effective oversight by the public and their elected representatives in Congress. Third, we should ‘stick to our knitting’ and not wander off to pursue perceived social benefits that are not tightly linked to our statutory goals and authorities.”

The latter point referred to the Fed implicating itself in the climate change debate.

In the absence of market triggers, neither crypto nor U.S. stocks were especially promising in the first hour’s trading on Wall Street.

In a fresh analysis, Filbfilb, co-founder of trading suite DecenTrader, outlined potential upside and downside targets for BTC price action in the short term.

Volatility, as Cointelegraph reported , was still expected on Jan. 12 with the release of Consumer Price Index (CPI) data for December.

“Buyers have been found for 2 months below 16.5k,” he told Telegram channel subscribers, highlighting several weekly moving averages (WMAs) to bear in mind.

“20 WMA sits around 18.3k which is also the current range high, previous support, and diag resistance. If it breaks that key level, the top of the wedge would be the target, also the 200 WMA c.$24k.”

Should bearish tendencies return, meanwhile, a trip to as low as $14,000 remained possible.

“Liquidity shows that it might be a bit of a battle to make it up to 24k,” Filbfilb continued.

“If there is a curveball thrown into the mix, there is fuel in the tank to take us to 14-14.5k.”

Winklevoss accuses GBTC CEO Silbert of fraud

Elsewhere, tensions involving crypto conglomerate Digital Currency Group (DCG) continued to fester on the day.

Cameron Winklevoss, co-founder of exchange Gemini, followed up on an open letter to DCG CEO Barry Silbert accusing him of fraud and calling on the firm’s board to dismiss him.

The debacle, part of the global fallout from the collapse of FTX, focuses on locked customer funds and Silbert’s alleged unwillingness to cooperate with creditors’ demands.

The event, as before, nonetheless failed to produce noticeable price pressure on Bitcoin itself.

The views, thoughts and opinions expressed here are the authors’ alone and do not necessarily reflect or represent the views and opinions of Cointelegraph.

The Federal Reserve’s pursuit of a ‘reverse wealth effect’ is undermining crypto

The Federal Reserve is seeking to push investors into reevaluating their portfolios by injecting chaos into markets.

The Federal Reserve’s strategy to hike interest rates may continue, making it difficult for the crypto industry to bounce back. For crypto assets to become the hedge against inflation, the industry needs to explore ways to decouple crypto from traditional markets. Decentralized finance (DeFi) can perhaps offer a way out by breaking away from legacy financial models.

How Federal Reserve policies are affecting crypto

In the 1980s, Paul Volcker, the chairman of the Federal Reserve Board, introduced the interest hiking policy to control inflation. Volcker raised interest rates to over 20%, forcing the economy into a recession by reducing people’s purchasing capacity. The strategy worked, and the Consumer Price Index (CPI) went down from 14.85% to 2.5%. Even now, the Federal Reserve continues to use the same methodology to bring down high inflation rates.

In 2022, core U.S. inflation reached a 40-year high, making the Federal Reserve consistently hike interest rates throughout the year. This has negatively hit the crypto market. Mike McGlone, the Senior Commodity Strategist at Bloomberg Intelligence, explained that the Fed‘s “sledgehammer” has “been pressuring crypto this year.” McGlone believes that the Fed’s policies could lead to a crash that is worse than the 2008 financial crisis.

Market data shows a clear pattern where the Federal Reserve’s interest rate hikes correspond to significant drops in cryptocurrency prices. For example, Bitcoin (BTC) prices declined on May 6 after the Fed’s meeting on May 3 and 4 to increase interest by 0.5%. Similarly, Bitcoin fell to $17,500 after the Fed meeting on June 14 and 15, where they raised interest rates by 0.75%.

The rate hike in June was a significant factor for cryptocurrencies like BTC and Ether (ETH) to fall 70% since their all-time highs. As the price charts demonstrate, the Federal Reserve’s policies have a direct correlation with crypto market volatility. This uncertainty hampers the crypto industry from making a definitive comeback. Since cryptocurrencies are a risky asset class, investors are reducing their exposure to crypto due to rising interest rates and recession fears.

The Federal Reserve implemented another 0.75% hike in interest rates in November. The Fed said it was trying to bring down “inflation at the rate of 2 percent over the long run”. The Fed Committee will continue to hike federal fund rates to 3-4%. It “anticipates that ongoing increases in the target range will be appropriate in order to attain a stance of monetary policy that is sufficiently restrictive to return inflation to 2% over time.”

As inflation remains high, there’s no reason to believe that the Federal Reserve will stop hiking interest rates anytime soon. Unfortunately, this isn’t good news for risk assets like cryptocurrencies.

The future trajectory of Fed policies

In all probability, the Federal Reserve will continue with its interest rate hikes in accordance with market data feedback. Bank of America wrote, “The Fed will stress data dependence […] they will get two more NFP and CPI prints before the [December] meeting; if they stay hot, another 75 bps is in the cards, if not, a deceleration to 50 bps is possible.” The strategists added, “The Fed isn’t done hiking until the data says so.”

Echoing the sentiment, Barclays’s credit research team said, “The Fed needs to see inflation turning … before turning meaningfully dovish.” So, there’s a high chance that even if the Federal Reserve reduces the hike percentage, they’ll keep raising interest rates. Depending on inflation figures, the Fed might slow down its liquidity tightening measures from December but won’t stop with its inflation mitigation strategies immediately. Thus, investors need to brace for a long period of crypto market volatility.

The Federal Reserve intends to create a reverse wealth effect so that investors reassess their crypto portfolio. They want to create a precarious market situation by slowing down demand but also be careful to avoid any chaos. Despite the U.S. GDP contracting for two consecutive quarters, the Fed is eager to evaluate and implement painful policies. So, the crypto industry needs to find alternative methods to tackle the Fed challenge.

The current market scenario demonstrates that crypto asset prices are entwined with the equity and stock markets. Investors still consider them to be high-risk assets and get skeptical about investing during high inflation periods. So, it is imperative for the crypto sector to distance itself from other traditional risky asset classes. Fortunately, a U.S. central bank report suggests that risk perception towards crypto is gradually changing.

According to a Federal Reserve Bank of New York report, cryptocurrencies are no longer in the top 10 most cited as potential risks for the U.S. economy. This reveals an important change in the investor mindset, demonstrating that crypto will eventually become a non-risky asset class. But, that won’t happen if crypto continues to follow the legacy financial model. To beat inflation and offset Fed policies, the crypto industry must embrace decentralized finance for a robust future economy.

Bernd Stöckl is the co-founder and chief product officer of Palmswap, a decentralized perpetual contract trading protocol.

This article is for general information purposes and is not intended to be and should not be taken as legal or investment advice. The views, thoughts, and opinions expressed here are the author’s alone and do not necessarily reflect or represent the views and opinions of Cointelegraph.

Bitcoin sees worst monthly close in 2 years as traders watch $16.7K

BTC price action strengthens into the November monthly candle close, but traders are already warning over getting too “cocky” on Bitcoin.

Bitcoin (BTC) attempted to flip $17,000 to support on Dec. 1 after sealing its lowest monthly close in two years.

Bitcoin gains inch up as November end

Data from Cointelegraph Markets Pro and TradingView showed BTC/USD circling $17,100 in a second intraday charge at higher levels.

The pair managed to avoid losses as the monthly candle closed, instead seeing solid daily gains of around 4.5% for Nov. 30.

Nonetheless, Bitcoin shed 16.2% for the month, making November 2022 its worst since 2019.

*BTC/USD monthly returns chart (screenshot). Source: Coinglass*

The more buoyant mood coincided with comments from the United States Federal Reserve. In a speech on inflation and the labor market, Chair Jerome Powell openly stated that smaller interest rate hikes could begin as soon as December.

“Monetary policy affects the economy and inflation with uncertain lags, and the full effects of our rapid tightening so far are yet to be felt,” he said:

“Thus, it makes sense to moderate the pace of our rate increases as we approach the level of restraint that will be sufficient to bring inflation down. The time for moderating the pace of rate increases may come as soon as the December meeting.”

Powell characteristically cautioned on heralding a full turning point in policy, something markets had been keenly awaiting throughout the year.

“Given our progress in tightening policy, the timing of that moderation is far less significant than the questions of how much further we will need to raise rates to control inflation, and the length of time it will be necessary to hold policy at a restrictive level,” he added.

Nonetheless, stocks reacted positively, with the S&P 500 and Nasdaq Composite Index ending the day up 3.1% and 4.4%, respectively, in line with Bitcoin.

No euphoria among traders

In responses of their own, meanwhile, crypto market commentators were equally cool on the immediate prospects despite the moderate month-end gains.

Crypto Tony warned that bulls were “getting cocky” into December and that now was not a suitable blind entry point.

“Now is not the time to go all in, thinking this is the bottom on Crypto,” he told Twitter followers:

“We have yet to see : – A macro higher high and higher low (Market structure trend change) – Bull volume coming in – Spot buys on the increase – Completed corrective structure.”

*BTC/USD annotated chart. Source: Crypto Tony/ Twitter*

A key level to hold for continuation of the “bullish market structure,” he added, was $16,700.

Michaël van de Poppe, founder and CEO of trading firm Eight, agreed on the importance of an area focused on $16,700 for his own strategy.

The views, thoughts and opinions expressed here are the authors’ alone and do not necessarily reflect or represent the views and opinions of Cointelegraph.

DeFi needs appropriate regulation before expanding to retail: Chair Powell

Jerome Powell acknowledged that DeFi will start to reach more retail customers, highlighting the need for regulation.

United States Federal Reserve chairman Jerome Powell has spoken out about the expansion of decentralized finance (DeFi) and its impact on the traditional finance ecosystem, calling for appropriate regulation.

During an event titled the “Opportunities and challenges of the tokenisation of finance” hosted by the Banque de France on Tuesday, Jerome Powell said there were “very significant structural issues around the lack of transparency” in the DeFi ecosystem.

The comments followed those by Bank for International Settlements (BIS) general manager Agustín Carstens who expressed concern over the contrast between DeFi and traditional finance.

Carstens added that the “huge challenge” that they, central bankers and regulators, face is that the DeFi and crypto world is global and borderless.

Powell acknowledged that the interaction between DeFi and the banking system has not been significant from a financial stability viewpoint, limiting the impacts of the “DeFi winter.” However, it demonstrated the weaknesses and work that needs to be done around regulation, he added:

“We need to be very careful about how crypto activities are taken within the regulatory perimeter, where ever they take place […] there is a real need for more appropriate regulation.”

Powell added that as DeFi expands and starts to touch more retail customers, appropriate regulation needs to be in place. The comments suggest that Powell is confident that DeFi will see a great deal of growth in the future despite the current market doldrums.

DeFi total-value locked (TVL) has fallen 71% from its late-December all-time high to around $62 billion, according to DefiLlama. The decline is in line with that of cryptocurrency markets which have retreated by a similar percentage.

Major digital asset firms have largely welcomed the Biden administration’s efforts to push for a clearly defined regulatory framework for crypto. However, the wheels of bureaucracy turn slowly in the United States and there is likely to be a lot of deliberation before anything solid is on the table.

The Fed chair also spoke about a U.S. central bank digital currency (CBDC), stating that should one be launched, it would not be anonymous and would include identity verification for users.