Ethereum's growth was likewise modest. But there may be some good news for the crypto sector from a top Fed official.
Progress in the fight against inflation, according to Raphael Bostic, president of the Atlanta Federal Reserve, may result in a slowed increase in interest rates.
The Federal Reserve's tough approach contributed to a major fall in the cryptocurrency market. In the US, the Federal Reserve is in charge of fighting inflation. In order to counteract rising inflation rates, the Federal Reserve uses quantitative tightening and interest rate increases. As typically dovish members adopted hawkish attitudes to combat inflation, the cryptocurrency market became concerned. When Fed Chair Jerome Powell hinted in his Jackson Hole speech that firms and consumers might soon experience hardship, the cryptocurrency market crashed. Many experts started to worry that an interest rate increase of 100 basis points was inevitable.
Given this, the remarks made by Bostic of the Atlanta Fed may be encouraging for the cryptocurrency market. He admits that lower inflation may influence him to favour reversing the 75 bps hikes. He also says that there are "glimmers of positive news" in the data from the summer. August's Consumer Price Index was lower than anticipated. It was the start of inflation cooling. The Personal Consumption Expenditure further supported the idea that inflation was slowing. After both reveals, the cryptocurrency markets surged.
A 50 bps increase may be thought about if the following data also shows that the Fed is making headway.
At FOMC meetings, the Federal Reserve makes decisions about interest rate increases. The following FOMC meeting will take place on September 20 and 21. According to the CME FedWatch Tool, there is a 27.5% chance of a 50 bps hike and a 72.5% chance of a 75 bps increase.