Amidst the instability on the cryptocurrency market, significant events related to legislative initiatives and Federal Reserve representatives' statements have occurred.
Bitcoin Price Fluctuations and Legislative Issues
Bitcoin’s price fluctuated around $116,000, reflecting daily losses approaching 3%. The U.S. House of Representatives rejected the procedural vote for crypto legislation. This indicates that votes on these laws won’t happen this week, effectively undermining Trump’s recent optimistic declaration of a 'HAPPY CRYPTOCURRENCY WEEK.'
Reports suggest there might be another vote on the crypto bill rules in the House later. Trump, understandably upset, is reaching out to members about the legislative pause.
Fed's Statements and Their Impact on Economic Conditions
Concurrently, Fed member Collins delivered statements with implications for the market’s risk perceptions, focusing on tariffs’ impact on inflation and the potential path of interest rates.
Collins noted that a robust economy provides the Fed with a window to determine its next interest rate decisions. He acknowledged the challenges of setting monetary policy amid uncertain conditions.
It’s time, he said, for the Fed to exercise patience with its monetary policy. Tariffs are expected to push inflation higher in the second half of 2025, with core inflation nearing 3% by the end of the year. However, strong corporate and household financial positions may lessen the negative effects of tariffs.
General Conclusions on the State of the Crypto Market
In conclusion, while tariffs may slow employment growth, the impacts won’t be overly severe. Good profit margins can mitigate the impact of tariffs, although these tariffs will exert pressure on the currently strong economy for some time. Overall, the economy is in good shape, although core goods inflation shows some effects of tariffs. Collins anticipates downward pressure on employment and growth.
The cryptocurrency market is facing challenging times, encountering legislative and economic hurdles. The impact of Fed decisions will determine future trends within the crypto market.
