Crypto price check: Bitcoin edges higher after weekend slide
Cryptocurrency prices were on the rise on Monday after a sharp drop that came after Federal Reserve Chairman Jerome Powell said the US economy will likely need higher interest rates for a longer period of time to curb spiraling inflation.
Speaking at the Kansas City Fed’s annual central bank symposium in Jackson Hole, Wyo., Powell said Friday that higher interest rates are likely to lead to weaker near-term growth and softer labor market conditions, describing it as the “unfortunate cost of reducing inflation”. .”
The cryptocurrency market has lost more than $2.1 trillion from its November record of more than $3 trillion.
Critical psychological level
Bitcoin, the most popular cryptocurrency, was up 1.1% at $20,270.68 at last check, according to CoinGecko, after slipping below the psychological threshold of $20,000. Bitcoin has fallen 6.2% in the past seven days.
Winston Ma, managing partner of CloudTree Ventures, said the crypto market would focus on bitcoin’s $20,000 level “as the most important barometer of overall market sentiment.”
“After several months of ‘crypto winter, the $20,000 price level of bitcoin is a critical psychological level for the crypto players,” said Ma, author of “Blockchain and Web3: Building the Cryptocurrency, Privacy, and Security Foundations of the Metaverse.”
“But as Powell warns of ‘pain’ ahead, Fed actions are far from reassuring for those hoping for bullish impulses in the near future.”
Ether, the native cryptocurrency of the ethereum blockchain, rose 1.8% to $1,518.04, down 6.2% in the past week. Dogecoin was up almost 1% to $0.063662 after being down 8.6% in the past week.
Frank Corva, senior digital asset analyst at Finder, said the last two times Powell raised rates by 0.75 percentage points, which he called “aggressive increases,” the market rallied in response.
Not immune to Fed policy
“For this reason, many crypto and stock holders felt that even though Powell was hawkish in his comments in Jackson Hole, Wyo., this past Friday, the markets would rally again,” he said “And Powell was hawkish in his sub-10 – minute speech, but the markets did not rally. Instead, they did the opposite.”
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The price of bitcoin fell about 9% and the price of ether fell about 13% before the day was out, he said.
Corva said the narrative surrounding ether’s price surge in anticipation of the September 13 merger — when the Ethereum network transitions from a proof-of-work to a proof-of-stake blockchain — quickly faded over the weekend. Ether’s price dropped as low as $1420.
“The price drop in BTC and ETH that apparently occurred as a result of Powell’s hawkish comments was further evidence that crypto is currently not uncorrelated to traditional markets, nor immune to Fed policy,” he added.
Corva said that until the Fed becomes more dovish, “crypto and other risky assets will likely continue to suffer — or at least stagnate.”
Separately, David Lesperance, managing partner of immigration and tax advisory at Lesperance & Associates, said Teneo, liquidator of Three Arrows Capital, secured a court ruling in Singapore to round up and preserve the defunct hedge fund’s assets.
Establishment of assets
“This decision gives Teneo the authority to request access to all financial records the fund kept locally,” Lesperance said. “They want to establish what assets we had in Singapore – such as bank accounts, properties, cryptocurrencies, non-functional tokens and stakes in companies that were linked to Three Arrows and/or its founders.”
A court in the British Virgin Islands in June appointed Teneo to liquidate Three Arrows’ assets.
“Teneo has gained control of at least $40 million of Three Arrows’ assets,” Lesperance said, “a fraction of the $2.8 billion in unsecured claims filed so far.”
Su Zhu, who co-founded Three Arrows Capital with Kyle Davies, delivered an affidavit in person in Bangkok on August 19, accusing the liquidators of misleading the High Court of Singapore about the hedge fund’s structure, according to Bloomberg.
Zhu said the liquidators have made “inaccurate and misleading” representations of the operations, relationships and timelines related to these entities in their petitions to the Singapore court.
The whereabouts of Zhu and Davies have been unclear since Three Arrows Capital collapsed.