Bitcoin (BTC) may have broken through the key USD 50,000 barrier, but crypto investors might be wise to keep their champagne on ice – with United States politicians and regulatory bodies possibly gearing up to the crash the celebrations later this week.
The token is now trading just over USD 50,000 at the time of writing, per CoinGecko data. But as the last full week of summer begins, Washington officials appear to be planning action that could well impact the sector.
The Federal Reserve will not be holding an in-person summit this year, with the Federal Reserve Bank of Kansas City instead announcing that it “will host its 2021 Economic Policy Symposium” “virtually.” The highlight of this event will be Chairman Jerome Powell’s August 27 speech entitled “Macroeconomic Policy in an Uneven Economy.”
Also known as the Jackson Hole Economic Symposium, the summit usually sees attendees address important and pressing matters of policy.
In 2016, the symposium attempted to tackle the impact of a worldwide recession, while in 2018, it spoke about ways to check the power and influence of domestic tech titans like Google, Facebook, Amazon and Apple.
Mati Greenspan, the Founder and CEO of Quantum Economics, warned in a post late last week that “an unwinding Fed could present more than a few problems” to the crypto sector.
However, he opined that “the possibility that the central bank will announce any pivotal changes seems strikingly low,” adding that the Fed’s messaging would more likely amount to “saying COVID-19 is still out there and we need to remain vigilant with our foot firmly on the gas pedal of the money printer.”
Greenspan added that Powell’s speech would “likely be the main focus of all financial markets throughout the course of next week,” with “heavy volatility expected.”
Meanwhile, Powell could be set to win a second term at the head of the Fed after winning the Treasury Secretary Janet Yellen’s support, Bloomberg reported.
The media outlet claimed the Treasury chief had “told senior White House advisers that she supports reappointing” Powell, citing “people familiar with the matter.”
These same sources claimed that the move “increases his chance for a second term,” but added that President Joe Biden “hasn’t made a decision yet and is likely to make his choice around Labor Day [September 6].”
Powell has spoken about crypto in withering terms this year, stating variously that tokens are “vehicles for speculation,” and that they have “failed” to perform as forms of payment.
Some are concerned that the involvement of the Treasury in any form could be an ominous signal, even if Yellen does not have the crypto sector directly in her sights.
In a newsletter, Ryan Selkis, the CEO of the crypto researcher Messari, wrote:
“[The] Treasury is not your average bumbling government adversary. They can do real damage.”
Selkis added that the much-maligned infrastructure bill and the political and economic fallout of the fall of Kabul could spell bad times ahead for crypto enthusiasts.
He concluded:
“While there’s a lot to be excited about in crypto, now is not a good time to be sanguine about the industry’s future prospects. If it doesn’t feel like wartime yet, it will soon.”
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