Once again, an exit from Jérôme Powell, the president of the FED (US Federal Reserve), negatively impacted the price of the main cryptocurrencies and shook the sector. As markets began to show an uptrend, investors may not be out of surprises.
Jerome Powell warns against cryptocurrencies
The Chairman of the US Federal Reserve (FED) is calling for more regulation in decentralized finance and is hurting the price of major cryptocurrencies. Indeed, bitcoin (BTC) and ether (ETH) fell after Powell’s statements.
According to the latter, the recent drop in prices is proof that the crypto market has structural problems. Following his comments, BTC plunged to an intraday low of $18,553. This drop comes less than 24 hours after hitting a high of $20,338. Currently, bitcoin is trading at $19,326 following the reaction of the bulls that pushed the price away from this level.
However, the crypto major is not the only one to suffer the devastating effects of this statement. Ethereum (ETH), the second-largest crypto by market capitalization, followed the trend. Ether is trading lower in today’s session and is trading around $1,323.60 according to data from Tradingview after falling below $1,300.
Unbeatable central banks?
This isn’t the first time Powell has gone after digital assets. In late August, his comments sent bitcoin down 7%. On September 27, central bankers met at the Louvre Museum in Paris. During this conference, which discussed the opportunities and challenges of the tokenization of finance and the role of central banks, the President of the FED did not hesitate to take sides.
According to his statements, nothing can overcome central banks. While the launch of MNBC (central bank digital currency) is imminent and DeFi attracts the curiosity of regulators, the same is not true for stablecoins.
The latter seem to be their main concern and there is no doubt that the FED and the ECB feel threatened. Indeed, stablecoins somehow represent the loss of a monopoly and control at the same time.
Anyway, Jérome Powell argues that there is no stable balance between DeFi and traditional finance. Because of this, he says that you have to be very careful about how crypto activities evolve within the regulatory perimeter. In the meantime, bitcoin (BTC) and Ethereum (ETH) are paying the price.
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