Bitcoin

<h2 id="key-facts">Key Facts</h2><ul><li>Fed Chair Kevin Warsh struck a hawkish tone on inflation at the Jackson Hole symposium on Friday, though he stopped short of committing to a rate hike.</li><li>Bitcoin fell from around $80,000 to below $77,000 after the speech before recovering to about $78,000, while prediction markets swung to narrowly favor a rate hike.</li><li>Analysts including Charles Schwab's Jim Ferraioli said a hawkish Fed puts the "debasement trade" behind Bitcoin's recent surge back in check.</li></ul>US Federal Reserve Chair Kevin Warsh delivered a hawkish message on inflation at the Jackson Hole symposium on Friday, prompting increased expectations that the Fed will hike interest rates and sending Bitcoin’s (<a href="https://coinmarketcap.com/currencies/bitcoin/" rel="noopener noreferrer">BTC</a>) price down.Bitcoin was trading around $79,500 when Warsh began speaking at 14:00 UTC. After the speech, it briefly fell below $77,000, hitting a 24-hour low of about $76,900, before recovering to around $78,000 — down roughly 3.4% over 24 hours — according to CoinMarketCap data.<img src="https://academy-public.coinmarketcap.com/optimized-uploads/40697d0fabcc428698ca033c52a8111b.png">Bitcoin price, 24 hours. Source: CoinMarketCapWarsh, marking his 100th day as chair, said the Fed's "predominant focus right now should be on prices" as inflation runs above the central bank's 2% target. But he pointedly declined to signal the next move."I stand here today committed to a discipline, not to a decision," he said in his <a href="https://www.federalreserve.gov/newsevents/speech/warsh20260828a.htm" rel="noopener noreferrer nofollow">keynote</a>, adding that he would be "hard pressed to describe broad financial conditions as restrictive."Markets still read the remarks as a lean toward tighter policy. On <a href="https://coinmarketcap.com/academy/glossary/prediction-market" rel="noopener noreferrer">prediction market</a> Polymarket, the chance of a September rate hike <a href="https://polymarket.com/event/fed-decision-in-september-762" rel="noopener noreferrer nofollow">moved</a> narrowly ahead of no change after having trailed behind all week. Charles Schwab's Cooper Howard, director of fixed income research and strategy for the Schwab Center for Financial Research, <a href="https://www.youtube.com/watch?v=88ivoS276TE" rel="noopener noreferrer nofollow">called</a> the odds "about a coin flip."<h2 id="what-a-hawkish-fed-means-for-bitcoin">What a Hawkish Fed Means for Bitcoin</h2>Rate hikes are generally seen as bearish for Bitcoin, and crypto has <a href="https://coinmarketcap.com/academy/article/btc-eth-dip-after-fed-holds-rates-as-hike-risk-stays-on-the-table" rel="noopener noreferrer">dipped on hike fears before</a>. This is because higher <a href="https://coinmarketcap.com/academy/glossary/interest-rates" rel="noopener noreferrer">interest rates</a> make yield-bearing bonds more attractive and tend to pull liquidity away from risk assets such as Bitcoin.Scott Melker, known as “The Wolf Of All Streets,” said the market had expected Warsh to "follow in his buddy Bessent's path" and ease policy to support the Treasury. Instead, Melker <a href="https://x.com/scottmelker/status/2093375202646437915" rel="noopener noreferrer nofollow">said</a>, Warsh chose to "come in hawkish and say we have a strong economy and inflation is still a problem."<img src="https://academy-public.coinmarketcap.com/optimized-uploads/b4c3df983c644234a05b6cc796491f48.png">Jim Ferraioli, Charles Schwab's director of crypto research and strategy, said the past week had seen a "rebirth of the debasement trade," the rotation into scarce <a href="https://coinmarketcap.com/academy/glossary/store-of-value" rel="noopener noreferrer">stores of value</a> like gold and Bitcoin, and that Warsh's tone put that narrative "back into check." He called the pullback muted and tied the restraint to a positioning reset after a short squeeze last week that left the market less leveraged."Liquidations of levered futures typically can explain 50% of Bitcoin's daily price move," he said. So, with positioning reset, there was "less fuel for the fire."Still, tighter Fed policy may not be the whole liquidity story. <a href="https://coinmarketcap.com/academy/article/treasury-bond-buybacks-bitcoin-bull-market" rel="noopener noreferrer">As CoinMarketCap recently reported</a>, the US Treasury's expanded bond buybacks could add <a href="https://coinmarketcap.com/academy/glossary/liquidity" rel="noopener noreferrer">liquidity</a> to markets even if the Fed holds or raises rates, a potential counterweight to a hawkish central bank.<blockquote>Read More:<a href="https://coinmarketcap.com/academy/article/rate-hikes-and-the-fed-how-do-they-affect-crypto-markets" rel="noopener noreferrer">Rate Hikes and the Fed: How Do They Affect Crypto Markets?</a></blockquote>

Bitcoin Falls Below $77K as Fed's Warsh Delivers Hawkish Jackson Hole Speech

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