Powell's speech led to another drop in the crypto market

Friday's report by the head of the US Federal Reserve Jerome Powell provoked a decline in the crypto market, outlining new targets of the central bank and future macroeconomic factors that will be unfavorable for the growth of the cryptocurrency industry. 

According to the results of the first half of the year, the consumer price index in the United States increased by 8.5% year-on-year. Inflationary processes and the growth of household personal consumption expenditures had a positive impact on the cryptocurrency market and caused a temporary upward rally. The two most popular digital currencies, bitcoin and Ethereum, have risen in price by 4% and 5%, respectively. 

However, after the Fed Chairman's speech, the price of bitcoin dropped to $19,540 from the level of $20,145. The value of Ethereum has fallen from the level of $1,492 to $1,422. The fall was caused by statements about future unfavorable macroeconomic factors.

We are talking about higher interest rates, slow economic growth and the damage to households and businesses that will be received in the process of returning inflation to the target level of 2%.

«Restoring price stability will take some time and will require the active use of all the Fed's tools to balance supply and demand. Reducing inflation is likely to require a sustained period of below-trend growth,» Powell said.

Earlier, former chairman of the U.S. Securities and Exchange Commission (SEC) Jay Clayton admitted that unanimity on the regulation of cryptocurrencies in the United States seems unattainable. Clayton noted that it is necessary to study new technologies first, and only then introduce any restrictions.