The crypto market witnessed a seesaw ride on Tuesday after Federal Reserve Chair Jerome Powell answered macroeconomic questions pertaining to the United States at the Economic Club of Washington. The statements made by the Fed Chair have elicited a favorable response from the financial markets, as seen by the 0.65% increase in the S&P 500 Index. In contrast, the ever-volatile digital assets market witnessed a 0.66% gain with the market cap hitting the $1.08 trillion mark. However, hours after the Powell speech ended, most of the gains were eradicated in both markets.
Crypto Market Turns Green
At its peak during Powell’s speech, the cryptocurrency with the largest market capitalization, Bitcoin (BTC), initially climbed to $23,311 from $22,960, while the altcoin supremo — Ethereum’s (ETH) price went from $1,616 to hit $1,666.
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Within minutes after the speech ended, the prices of flagship cryptocurrencies such as XRP, Solana, Dogecoin and Chainlink, including Bitcoin & Ethereum experienced a decrease in price. However, out of the top 150 coins by market value — Shiba Inu (SHIB), Fantom (FTM), Optimism (OPT), Terra (LUNA) and Quant (QNT) were the most hit, with some falling by over 3% in the past hour.
The stock market also witnessed a downward trend, following a brief uptick that occurred when Federal Reserve Chair Jerome Powell stated that inflation was on the fall. The S&P 500 had a loss of 0.3%, while the Nasdaq Composite suffered a loss of 0.2%. In addition, the Dow Jones Industrial Average also experienced a drop of around 202 points after increasing by more than 270 points at one point.
Powell’s Bullish Outlook
David Rubenstein, the co-founder of Carlyle Group, did not waste any time when he was being interviewed. He began by asking if the Federal Reserve’s decision to raise its benchmark Federal funds rate by only 25 basis points could have been altered as a result of last Friday’s blowout jobs report — which showed an increase of 517,000 jobs. Powell stated that there was a low probability that the news would have resulted in a change.
While speaking about the current state of affairs in the country, Powell stated that the U.S. economy is clearly slowing from the historically high growth rates of 2021, which reflected the reopening of the economy following the pandemic recession. While the latest economic data has been mixed and mostly positive, Powell considers the economy to show strong underlying momentum. According to the Fed Chair, the labor market is particularly strong, with 517,000 new jobs getting added for the month of January.
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