Bitcoin has reached historic highs for several weeks. But a decision by the American Central Bank (FED) and its president, Jerome Powell, does little more for investors. Enough to cause a significant fall in the queen of cryptocurrencies of around 8,000 dollars. Let’s take stock.
A problematic rate cut?
Officials of the American Federal Reserve decided to lower benchmark interest rates this Wednesday, December 18. This effort is expected to continue next year, but the pace is expected to slow. And it is this last point which hardly pleases traders. Indeed, lower rates tend to increase demand for cryptocurrencies from investors looking for higher returns.
Quoted by BloombergDavid Lawant, head of research at the cryptocurrency broker FalconX, however wants to be reassuring:
While macroeconomic factors traditionally influence cryptocurrency price action, sector-specific factors are expected to dominate in the coming weeks and months, particularly as the market anticipates policy changes from the new administration.
The FED skeptical about a Bitcoin reserve
Recently, President-elect Donald Trump raised the idea of a strategic bitcoin reserve in the United States, without providing much more detail, other than the idea of recovering cryptocurrencies seized from criminals. This would represent a stockpile of 200,000 tokens, or approximately $21 billion.
And Jerome Powell, the chairman of the Federal Reserve, does not really seem to like this idea. When asked about this, he replied: “We are not allowed to own bitcoins”. As for a possible change in the legislation to allow the FED to own it: “This is the kind of thing Congress needs to consider, but we’re not looking for a law change at the Fed.”.
According to Barclays analysts cited by Reutersfunding a strategic bitcoin reserve would likely require Congressional approval and the issuance of new Treasury bonds. They add: “We believe such a plan would encounter strong resistance from the Fed”.
In fact, the American Central Bank has always been reluctant on the subject of cryptocurrencies. She fears that these risky assets could endanger the security of consumers and the banking sector as a whole.
