• The Federal Reserve’s prediction of decreased inflation in 2023 has caused bitcoin to spike in price.
• Jerome Powell, the Federal Reserve chair, warned that there could be more rate hikes coming which will affect house and car sales.
• After 2022’s bearish period, bitcoin has been on a bullish run lately, giving investors hope for recovery.
The Federal Reserve Predicts Decreased Inflation
The Federal Reserve recently announced that it is predicting decreased inflation for 2023. This news caused the price of bitcoin to rise a bit as investors saw this as good news for the cryptocurrency market.
Powell Warns of Rate Hikes and Inflation Goals
Jerome Powell, the Federal Reserve chair, warned about potential rate hikes in the coming months which could lead to people not being able to purchase houses or cars due to interest rates being too high. He also stated that he does not think that the agency’s goals for inflation will be hit in 2023.
Bitcoin’s Bearish Run in 2022
Prior to 2022, Bitcoin had reached an all-time high of $68,000 per unit but then dropped into the high $40,000 range over a span of 8 weeks. By the end of 2022 it was trading at around $16,600 – more than 70 percent below its all-time high – causing the crypto industry to fall below $1 trillion where it had been valued at over $3 trillion 11 months earlier.
Recent Bullish Run
However, Bitcoin has now been experiencing something of a bull run lately as it has added about $7K to its price over the last few weeks giving investors hope for recovery from its bearish period in 2022.