Bitcoin's fall shows why a reserve of BTC in the United States matters
After following a path that brought it closer to USD 110,000, the price of bitcoin (BTC) recorded a significant drop on December 18. The digital currency's quotation decreased to levels around USD 96,000 due to statements from Federal Reserve (Fed) Chairman Jerome Powell.
The official talked about the possibilities of creating a bitcoin reserve, pointing out the limitations posed by the Federal Reserve Act.
This is an idea that caused a stir in the markets, highlighting the importance that the topic has gained among investors, even though it has been in the public eye for only a few months and only gained traction after Donald Trump's electoral victory.
In this way, the proposal, which seemed like an isolated idea at the beginning of this year, has become a key point in the assessment that traditional investors make of the cryptocurrency market. Hence the effect caused by Powell's cautious attitude.
The impact of this clear rejection by the Fed on the market was immediate. The value of the cryptocurrency, which had increased significantly since Donald Trump's election, experienced a significant drop.
And although long-term bitcoin price predictions remain good, it is clear that the uncertainty about whether or not the BTC reserve will be created marks a moment of uncertainty, which both traditional and institutional investors see as a possible setback.