Bitcoin and Crypto Market Continue to Decline Despite Fed Chair Powell’s Hints of Further Rate Cuts

• Fed Chairman Jerome Powell hinted at the possibility of further rate cuts later in the year.
• Historically, the crypto market has performed better in low interest environments.
• Despite the speech, Bitcoin and the crypto market continued their downward trend, with an overall decline of 4.2% in the last 24 hours.

The overall crypto market continued on a downtrend on Monday, despite Fed Chairman Jerome Powell hinting at the possibility of further interest rate cuts later in the year.

The crypto market is seeing a decline amid the possibility of further rate cuts

Federal Reserve (Fed) Chairman Jerome Powell said Monday that the 50 basis point interest rate cuts should not be interpreted as evidence that future cuts will be as large.

“Looking ahead, if the economy performs broadly as expected, policy will shift to a more neutral position over time. But we’re not on a set course,” Powell told the National Association for Business Economics.

Powell said the economy is in solid shape, indicating a desire to keep it that way. He also noted that the decision to cut the rate by 50 bps reflects growing confidence in a stronger labor market, which would eventually lead to lower inflation.

In addition, Jerome Powell hinted at the possibility of more interest rate cuts, which will be decided based on economic data. “As we consider further policy adjustments, we will carefully assess the incoming data, the evolving outlook and the balance of risks,” Powell said.

Further Fed rate cuts may have a positive impact on the crypto market as history has shown a correlation between the price of Bitcoin and lower interest rates.

This trend was particularly evident during the bull run of 2017 and the initial coin offering (ICO) boom, when rates were roughly between 0.75% and 1.25%. However, a market correction began in 2018 as the Federal Reserve began raising interest rates.

Following Powell’s speech on Monday, the crypto market remained muted, with the overall market down 4.2% at press time.

Major cryptocurrencies including Bitcoin, Ethereum and Solana saw declines of 3.5%, 2.3% and 2.6% respectively.

The AI ​​category has also seen a decline over the past 24 hours, with major tokens such as NEAR, ICP, ASI, RENDER and GRT all down along with the rest of the market.

The meme coin category was not left out, with tokens such as DOGE and SHIB posting close to 10% declines on the day.

This shows that the market has not yet reacted to Fed Chair Powell’s news, but the possibility of more rate cuts could attract more investors to the digital asset sector.

Black Swan Capitalist co-founder Vandell noted that the speech could spur bullish momentum among crypto assets.

“Very POSITIVE for risk assets like crypto. Rate cuts = Increased credit creation = Increased global liquidity = Massive Crypto Bullrun. Momentum is unarguably by design,” Vandell said in an X post.

Other members of the crypto community shared their optimism and offered a bullish outlook for Bitcoin as the Fed Chair hints at the possibility of another rate cut.