The market is buzzing with confusion and disappointment. Why did #Bitcoin take a hit, even after last night’s seemingly good news? Let me break it down for you.
During a recent Federal Reserve Q&A session, someone raised a question about Bitcoin. Chairman Jerome Powell didn’t hold back, expressing skepticism about Bitcoin’s role in the financial system. According to Powell, neither he nor the Federal Reserve believes Bitcoin is suitable as a strategic reserve asset. While there is technically a legal pathway for Congress to amend existing laws and force the Federal Reserve to recognize Bitcoin, Powell clearly stated that he hopes this never happens. In short, the Fed maintains a negative stance on Bitcoin and has no plans to accept it as an official reserve asset anytime soon.
Now, some might wonder: isn’t the President in charge? Why can’t he resolve this? Think of it like this: imagine you were certain of a 100% win in a game, but suddenly two key opponents show up, reducing your odds to 70%. Wouldn’t you reconsider your strategy to account for new risks? This is precisely what’s happening. Market participants, who were bullish on Bitcoin, are now reevaluating their positions given the Fed's comments.
But why such a steep drop? The answer lies in market manipulation. While Powell's remarks fueled uncertainty, market whales likely used this sentiment to trigger panic selling, exaggerating the downward move. Understanding this dynamic can help traders navigate such volatile situations.