[Bitcoin Now] Powell's 'Hawkish' Speech Causes 6% Drop... Coin Market Cap Falls Below $1 Trillion

[Image source=Reuters Yonhap News]

[Asia Economy Reporter Lee Jung-yoon] The price of Bitcoin, the representative cryptocurrency, dropped more than 6% due to a hawkish speech by Jerome Powell, Chair of the Federal Reserve (Fed).

According to the global cryptocurrency market tracking site CoinMarketCap, as of 3:05 PM on the 27th, the price of Bitcoin was recorded at $20,141 (approximately 27.05 million KRW), down 6.14% from the previous day. This is the first time since the 27th of last month that the price has fallen into the $20,000 range. Additionally, the global cryptocurrency market capitalization fell below $1 trillion for the first time in six days.

The Bitcoin price plunged after Chair Powell reaffirmed the tightening stance during his speech at the Jackson Hole meeting, stating that "a restrictive stance must be maintained for the time being." Powell also said, "Unfortunately, reducing inflation comes with costs," and warned, "Failure to stabilize prices will inevitably lead to greater pain." He added, "History strongly warns against premature easing policies."

Edward Moya, Senior Market Analyst at global investment firm OANDA, explained, "The fight between Chair Powell and inflation will proceed aggressively even if it triggers a recession, causing risk assets to struggle."

The U.S. stock market, which shows a synchronized trend, also closed lower. On the 26th (local time), the Nasdaq Composite Index, centered on technology stocks, closed at 12,141.71, down 497.55 points (3.94%). The Dow Jones Industrial Average fell 1,008.38 points (3.03%) to 32,283.40, and the large-cap S&P 500 Index dropped 141.46 points (3.37%) to 4,057.66.

Investor sentiment remained at fear levels. According to cryptocurrency data provider Alternative, the Fear & Greed Index, which measures investor sentiment as an index, was recorded at 28 points (fear), down 1 point from the previous day. Alternative’s Fear & Greed Index ranges from 0 points, indicating extreme fear and pessimism about investing, to 100 points, indicating optimism.