TL; DR
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The US government plans to sell $1.9 billion worth of seized BTC, but the market doesn’t seem to care (meanwhile Jerome Powell’s ‘nothing burger’ speech helped push prices up ).
Full story
The federal government just gave the crypto market a slap in the face.
…right before you give him a hug.
The blow: When the FBI took down Silk Road, they seized a whole bunch of Bitcoin in the process… and on Tuesday they transferred ~30,000 BTC (~$1.9 billion) to sell on Coinbase.
(And that level of potential selling pressure usually causes the market to go into a selloff in anticipation of the sale).
The hug: Yesterday, Jerome Powell (Chairman of the Federal Reserve) spoke at Stanford.
And when J-Powell talks, market participants listen intently. Often a little at narrow…
(For example, we have heard people talking – in all seriousness – about making trades based on the color of Jerome’s tie).
Based on recent economic data, J-Powell said the following:
“Recent figures on both job growth and inflation have been higher than expected. However, recent data do not significantly change the overall picture.”
Translation: Yes, inflation is not falling in a straight line, but that is to be expected. We still plan to lower interest rates this year.
(Which will undermine the economy by reducing loan and credit repayments for everyone, giving them more disposable income).
Now, here’s the cool part!
The crypto market ignored the government’s potential ~$1.9 billion sale of Bitcoin and traded sideways on the news.
…but when J-Powell gave the mid-level “plans are unchanged” speech – most major cryptocurrencies rose higher in the news.
We’ll take it!