U.S. Fed Chair Signals Growing Support for Crypto as Bitcoin Shows Strength
Estimated Reading Time: 3 minutes
Don’t invest unless you’re prepared to lose all the money you invest. This is a high-risk investment and you are unlikely to be protected if something goes wrong. Take 2 minutes to learn more
Federal Reserve Chairman Jerome Powell recently addressed the U.S. Senate Committee on Banking, Housing, and Urban Affairs, where he acknowledged a shift in the government’s view of cryptocurrency. In the meeting, Powell stated that the crypto industry is no longer just a risky venture but is now becoming part of the mainstream financial system. However, his comments helped lift market sentiment slightly, with Bitcoin climbing over 1% and trading as high as $108,000.
To this end, his softer tone toward crypto drew attention, especially from Senator Cynthia Lummis of Wyoming, who supports digital assets. Although Powell recognized progress in the crypto space, questions about outdated rules still discourage the public when it comes to the use of crypto in banking.
Shifting Government Attitudes Toward Crypto
As it stands, Senator Lummis, known for backing crypto innovation, confronted Powell about rules adopted in 2023 that say public tokens go against safe banking practices. To this end, she questioned if these rules still made sense now that crypto is more mature and well-understood.
In response, Powell answered by pointing out that when the rules were made, the industry was still facing fraud cases. However, he admitted that things are changing for the better.
From another angle, Powell avoided directly promising to change the law despite recognizing current progress. He told Lummis he would revisit the issue, suggesting that the Federal Reserve is becoming more open to digital finance but cautiously.
Bitcoin Price Movement and Market View
The tone from Powell gave Bitcoin a boost, although it was not the only reason for the gains. At the time of reporting, Bitcoin was priced at around $107,364, up 1.25% from the previous day and 3.05% over the week. However, daily trading volume dropped by over 14%, showing that fewer investors were actively buying or selling.
Source: Tradingview.com
Yet, BTC’s total market value increased to $2.13 trillion, and its dominance of the overall crypto market rose to 65.72%, recording its highest level since January 2021. In the futures market, open interest in Bitcoin rose by nearly 5%, and $71.39 million worth of positions were liquidated, mostly from traders betting against the market. These figures show that despite some caution, overall market momentum remains in favor of crypto bulls.
In order to place winning trades with us via Bybit, you can open an account here.
