Cryptocurrency investors are closely monitoring the upcoming annual gathering of the Federal Reserve in Jackson Hole, where Federal Reserve Chair Jerome Powell's remarks could significantly influence market sentiment and interest rate policy going forward.
Bitcoin's Recent Decline and Its Causes
Ahead of Powell's anticipated speech, Bitcoin (BTC) briefly fell to $112,565 on Wednesday, marking a two-week low. Analysts indicate that this drop reflects 'rising nerves in the market' amid macroeconomic uncertainties surrounding the Fed chair's address, triggering 'fear spikes' among digital asset traders. Experts, including Ryan Lee from Bitget, suggest that if the $112,000 support level remains stable until the speech, it may create 'conditions for the next leg of the bull market rather than a reset.'
Investor Expectations Ahead of the Fed Meeting
Investor expectations for a potential interest rate cut took a hit following the August 12 release of the Consumer Price Index (CPI), which showed consumer prices rising 2.7% year-over-year, above the Fed's 2% target. Following this CPI report, the odds of an interest rate cut fell over 12%, down to 82%, after previously exceeding 94%. Forecasts indicate that the first rate cut of 2025 could act as a significant market catalyst, prompting expectations of two or three total cuts before the year's end.
Corporations Continue to Accumulate Bitcoin
Despite a shift in sentiment among retail investors, corporations are actively acquiring Bitcoin. Currently, 297 public entities hold Bitcoin, an increase from 124 at the beginning of June. This includes 169 public firms, 57 private firms, 44 investment and exchange-traded funds, and 12 governments that collectively acquired 3.67 million BTC, representing over 17% of the total supply.
In conclusion, Powell's upcoming speech may significantly impact the cryptocurrency market and asset valuations, while corporations continue to accumulate digital currencies, affirming their long-term investment intentions.
