Bitcoin Surges Above $22K as Powell's Congressional Testimony Boosts Market Sentiment

Federal Reserve Chairman Jerome Powell "stressed" on Wednesday that the central bank has yet to make a decision on the size of the rate hike, which will be discussed during the Federal Open Market Committee (FOMC) meeting scheduled for later in March. Powell made the statement during his semi-annual monetary policy report before the House Financial Services Committee.

Powell's remarks marked a notable change from Tuesday's Senate testimony, which had suggested that the Fed was likely to hike rates by 50 basis points at the upcoming FOMC meeting, instead of the previously assumed 25 basis points. This caused a significant decline in Bitcoin and stocks, while the dollar rallied.

However, Powell's insertion of the "no decision" wording on Wednesday may have been an attempt to soothe the hawkish fears that had developed in the market. In response to the news, Bitcoin bounced back more than $200, now standing at $22,200, while the S&P 500 moved from a modest loss to a modest gain. The dollar is also giving back some of Tuesday's significant advance.

Powell emphasized that the incoming data from important economic reports, including this Friday's February payrolls report and next week's inflation figures, will play an important role in guiding the rate decision. During the hearing, Powell also addressed a lawmaker's questions on the potential issuance of a central bank digital currency (CBDC), stating that the Fed had yet to make any decisions on the matter.

Although cryptocurrency was discussed during the hearing, it was not a major issue, even among lawmakers who tend to be outspoken on the sector. Powell's remarks, therefore, could have a significant impact on the market's reaction leading up to the FOMC meeting later this month.

Major cryptocurrencies are trading as follows as of 9 am IST, 9th March 2023:

Bitcoin: $22,060.78

-1.18%

Ethereum: $1,567.73
-1.44%

Tether: $1.02
+0.01%

USD Coin: $1.00
+0.02%

BNB: $294.67 USD
+0.07%

XRP: $0.3994
+3.49%

Dogecoin: $0.07324
-2.07%

Cardano: $0.3229
-2.81%

Polygon: $1.09
-6.22%

Polkadot: $5.71
-3.19%