The biggest drop at Ehtereum
Of the most popular cryptocurrencies, Ehtereum saw the biggest drop in value. It wrote off more than five percent in 24 hours and traded around $1,475 for most of the weekend. Yet the day before Powell’s speech, its value was above $1,700.
Bitcoin, as the oldest and most widely used cryptocurrency, has seen a similar development. Its value fell below the psychological $20,000 mark over the weekend, while it was still trading above $21,700 on Thursday. Bitcoin lost over three percent in a single day after Powell’s speech.
Tight monetary policy will cause an economic slowdown
Jerome Powell, the governor of the US central bank, did not make a very surprising speech in Jackson Hole. He confirmed that the Fed intends to continue to take very tough action against inflation, which is likely to cause the economic slowdown below the long-term trend. He also confirmed that the Fed will continue to raise interest rates. And that was probably a strong enough reason for investors to start getting rid of cryptocurrencies.