US Fed Chairman's Hawkish Comments Pour Cold Water on Cryptos, Sending Total Capitalization Down 3.8%

Although not a sudden change, the crypto market has witnessed a slight adjustment at the end of the trading day on Thursday in the US, following a speech by Federal Reserve (Fed) Chairman Jerome Powell. In a prepared speech at a conference in Dallas, Powell stated: "The economy shows no signs that we need to rush to cut rates. The current strength of the economy allows us to approach decisions cautiously." After these remarks, the price of Bitcoin (BTC) fell by about 1.5%, to $88,300, within a few minutes. At the time of the article's release, Bitcoin continued to adjust and fell an additional 2.38% during the day, to $87,654. Similarly, the price of Ether (ETH) also recorded a decline of more than 4% and traded around the $3,000 mark. However, the CoinDesk 20 Index, representing the major cryptocurrencies, increased by 0.5% over the same period, led by a strong 19% growth in XRP. This may be a reaction to recent statements by SEC Chairman Gary Gensler, leading many to speculate that he may be planning to resign after Donald Trump's victory. Before Powell's speech, many had predicted that the Fed would cut interest rates at its mid-December meeting. However, after the speech, this likelihood has decreased to 58.9% from 83% the day before, according to data from CME FedWatch. Similarly, traditional markets also recorded a slight adjustment during the day, with Nasdaq falling 0.75%, touching its lowest level in the session just minutes before the close. Despite the short-term adjustment, with the total market capitalization falling 3.8% during the day to around $3 trillion, the crypto market has maintained a strong upward trend in recent times. Bitcoin is still up 15% from a week ago, while other cryptocurrencies such as Cardano (ADA), XRP, NEAR, and Stellar (XLM) have all increased by 20% to 40%.