In recent times, Bitcoin (BTC) has made a resurgence, with its value surging 70% since the start of the year. The role of the Federal Reserve (Fed) Chairman Jerome Powell in this rally has been called into question, with some experts predicting that Bitcoin’s price may stumble if he fails to signal the anticipated end of the tightening cycle.
The Fed is due to announce its interest rate decision on Wednesday, with traders expecting a final 25 basis points increase to the 5%-5.25% range. The factors backing this expectation range from debt ceiling concerns and recession fears to ongoing crises at regional banks and bearish speculative frenzy on banking stocks.
However, should Powell not be clear in his confirmation that the tightening cycle has reached its end, Treasury yields and the U.S. dollar (USD) may see a bounce. Historically, an uptick in yields and the USD has not been favorable for Bitcoin. Accordingly, the head of research at foreign-exchange brokerage Pepperstone, Chris Weston, holds a similar perspective, as voiced on Twitter.
On the flip side, Marcus Thielen, head of research and strategy at crypto services provider Matrixport, doesn’t foresee a sustained dollar rally regardless of what Powell says during the post-meeting press conference. According to Thielen, the U.S. dollar is unlikely to rally since expectations of an eventual dovish pivot by the Fed will persist. He further stated that the stress on the banking sector is deflationary and due to the drop in energy costs; there is comfort that rate hikes are coming to an end.
Bitcoin’s impressive performance during recent banking turmoil has led to an increase in its safe-haven appeal. Despite the varying opinions, it seems clear that any decision Jerome Powell is set to make plays a substantial role in the future of Bitcoin, either boosting its rally or causing a stumble. However, regardless of Powell’s announcement, some experts believe that Bitcoin will continue to experience growth, spurred on by its strengthened safe-haven status.