Bitcoin’s price has sharply declined after an earlier surge on Wednesday, mirroring a downturn in U.S. stocks. As of the latest update, Bitcoin (BTC) is trading at $54,800, marking a nearly 4% decrease from the previous 24 hours and more than a 6% drop from the $57,600 peak earlier in the day. Ether (ETH) is performing even worse, trading at $2,322—a 7.1% decline over the last day—bringing its value ratio against Bitcoin to the lowest point in over three years. The CoinDesk 20 Index has also fallen by 3%.
The day began on a positive note following comments from Bank of Japan Deputy Governor Shinichi Uchida, who indicated that the central bank would not increase borrowing costs amid market instability. These remarks weakened the yen and boosted the Japanese stock market and U.S. index futures. The Nikkei closed up by 1.2%, and U.S. stocks initially opened 1.5% higher. However, this optimism waned as the day progressed.
Approximately ninety minutes before the close, the Nasdaq was down 0.8%, and the S&P 500 had declined by 0.6%.
In an interview with CNBC, JPMorgan CEO Jamie Dimon expressed skepticism about the U.S. Federal Reserve’s ability to achieve its 2% inflation target. Dimon highlighted concerns about deficit spending, increased military spending, and the transition to a green economy. He acknowledged the likelihood of a Fed rate cut but doubted its effectiveness.
Former Federal Reserve Bank of New York President Bill Dudley has suggested that the Fed needs to implement substantial rate cuts soon. In a Bloomberg article, Dudley argued that the evidence of a weakening labor market and moderating inflation indicates the Fed is lagging. He noted that the recent surge in unemployment has crossed the “Sahm rule” threshold, signaling a potential recession.
Dudley contended that the current monetary policy is too tight and called for at least 150 basis points in rate cuts to reach a neutral federal funds rate, with an additional 100 basis points required for accommodative conditions. He warned of increased volatility in stock and bond markets and anticipated that Fed Chair Jerome Powell’s cautious approach would delay any significant easing measures.
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