Janet Yellen Makes a Statement on Bitcoin Fall and Interest Rates
Janet Yellen, the United States Treasury and Finance Minister, made statements about the Bitcoin decline and cryptocurrencies. Janet Yellen, who had not spoken very positively about cryptocurrencies before, warned that investors should not panic this time.
Janet Yellen gave a speech about the US economy overheating. She said that interest rates can increase modestly in the nature of cold water to warming. She said that the financial markets reacted to this rate hike and that Bitcoin was also declining. Following this announcement, there was a 7% decrease in the Bitcoin price.
Why Does Janet Yellen's Rate Increase Affect Cryptocurrencies?
The reason why this rate hike is effective on the Bitcoin decline and price has also started to be discussed among investors. Janet Yellen reported that it was required for spending under the Biden presidency. Users then want to withdraw themselves due to the increase in interest rates.
The word "humble" used by Janet Yellen about the rate hike doesn't make much sense. People prefer Bitcoin and other cryptocurrencies because there is already interest in other investment assets. For this reason, interest in new digital asset investment instruments also triggers Bitcoin decline and other factors.
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As Bitcoin is very volatile (due to several reasons), it is opportunistic to attribute a normal fall in Bitcoin price to solely something that coincided with the fall. To attribute the fall in price to the increase in interest rate solely, without more, lacks sophistication in analysis. At best, the increase in interest rate could possibly been a contributive factor, among many others.