"Black Thursday"! The Fed cuts interest rates, and a single statement from Powell causes Bitcoin to plummet by 5%!
In the early hours of last night, the Federal Reserve announced a 25 basis point interest rate cut, which was expected. However, the subsequent hawkish comments from Fed Chairman Powell caused the entire market to crash.
Global stock markets fell, gold and silver plummeted, and cryptocurrencies took a nosedive, with Bitcoin dropping by 5%, falling below the $100,000 mark. A total of 250,000 people globally were liquidated, with a liquidation amount of $702 million.
What exactly did Powell say that caused such panic in the market?
Powell stated that the Federal Reserve is not allowed to hold Bitcoin and has not sought to amend the laws regarding whether it can hold Bitcoin.
I believe the market has overreacted. First of all, the Federal Reserve is a private company and does not belong to the U.S. government, nor does it represent any actions of the U.S. government. Secondly, the Trump administration's pro-cryptocurrency stance is well-known, and Trump has claimed that he would consider establishing a national Bitcoin reserve after taking office, having also hinted at establishing a Bitcoin reserve again during an interview at the New York Stock Exchange last week.
Therefore, I believe the market's decline is a result of overreaction, and it can be seen that Bitcoin has already begun to rebound, regaining the $101,000 level. In the U.S. stock market, Nvidia and Tesla, which saw significant declines last night, have already started to rebound, indicating that the market has also realized it overreacted.
What we need to do is to be brave in increasing our holdings of quality assets during times of emotional downturns, and to remain steadfast in our convictions!
