Powell’s Second Term as Fed Chairman Slows Down the Crypto Market

Bitcoin bull and billionaire investor Mike Novogratz warned that Jerome Powell’s second term at the Fed could slow down the crypto market, as Business Insider reports. This could make Powell feel freer to fight inflation and impose some restrictions on monetary policy, which would put a brake on crypto, stocks and all other assets.

On Wednesday, Novogratz told CNBC:

“The macro story has changed a little… people are getting quite pessimistic (about cryptocurrencies). Powell will be reappointed, and that may allow him to act more like a central banker than a man who wants to be reappointed. Inflation is making itself felt in the US in a rather bad way. Will the Fed have to act a little faster? That would put a brake on all assets. It would slow down the Nasdaq. It would slow down cryptocurrencies if we had to raise interest rates much faster than we thought.”

Earlier this week, Powell was nominated by President Joe Biden for a second term as chairman of the Federal Reserve. He helped the US economy cope with the Covid-19 crisis and oversaw the largest monetary stimulus in the country’s history.

Fed struggles with highest inflation rate in three decades

The Federal Reserve has lowered its bond premium. According to the minutes of the last monetary policy meeting, officials are open to a faster reduction in quantitative easing. According to FedWatch, investors believe that the Fed could raise interest rates in May next year.

Fed Funds Have Raised Many Top-20 cryptos

Bitcoin, Ethereum, Dogecoin and some other top 10 cryptocurrencies have been lifted by the Fed’s flood of money over the past 18 months. In the past, Novogratz has predicted that Bitcoin will reach up to $100,000 by the end of 2021.

Bitcoin only slightly bullish, if at all

At the moment, his prediction does not seem to be coming true. On Thursday, the crypto king gained almost 4% and was traded on the Bitstamp exchange for $ 58,667. At the time of writing, it changed hands for just under $54,200.

However, Novogratz, a former hedge fund manager, also stressed that there is still a lot to be excited about in the crypto market.

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