Recent events on global financial markets continue to impact the cryptocurrency sector. In this article, we will look at key news, such as Jerome Powell’s statement on central bank digital currencies, the launch of a cryptocurrency fund by Donald Trump’s company, changes in Goldman Sachs’ investment strategies, and Bitcoin’s reaction to rising inflation in the US.
Jerome Powell Is Not Onboard with Digital Currencies
Recently, Jerome Powell, the Chairman of the US Federal Reserve, stated that a central bank digital currency (CBDC) is not expected to be created in the US for the foreseeable future. He noted that despite growing interest in CBDCs in other countries such as China and the European Union, the US does not see the need to issue a government-backed digital currency, at least while he remains in office.
Powell explained that digital currencies are not currently a priority for the Federal Reserve and mentioned that the introduction of a CBDC would require serious discussions and long-term research to ensure its safety and economic viability. This statement reassured supporters of financial freedom and decentralization, though the situation could change in the future if technologies continue to develop.
Donald Trump Launches a Fund to Support Cryptocurrencies
Donald Trump’s company, World Liberty Financial, has launched a new reserve fund aimed at supporting cryptocurrency assets such as Bitcoin (BTC), Ethereum (ETH), and others. The fund, called Macro Strategy, will invest in digital assets, strengthening the financial potential of the cryptocurrency industry.
This move is part of Trump’s broader plan to create a more stable platform for cryptocurrency investments. Despite political and economic challenges such as cryptocurrency volatility, Trump and his company express confidence in the continued growth and stability of Bitcoin and other cryptocurrencies. The fund’s launch is an important step in supporting institutional investments in crypto assets, which may serve as an additional boost for the overall growth of the crypto market.
Goldman Sachs Increases Investments in BTC-ETF
In the fourth quarter of 2024, investment bank Goldman Sachs increased its investments in Bitcoin ETFs (exchange-traded funds) to $1.5 billion. This decision strengthens Goldman Sachs’ position as one of the leading banks actively supporting the cryptocurrency market through institutional investments.
Previously in 2023, the bank had already made steps to expand its presence in the crypto market, but the increased investments in Bitcoin ETFs emphasize its ongoing belief in the potential of cryptocurrencies and that they will eventually become a significant part of the traditional financial system. The bank’s investments, aimed at developing cryptocurrency products and ETFs, are boosting confidence among institutional and retail investors, which could further promote the popularity of digital assets in global markets.
Inflation in the US Exceeds Expectations: How This Affects Bitcoin
Recent news about inflation in the US rising to 3% by December 2024 had a significant impact on financial markets, including the cryptocurrency sector. The inflation figure exceeded expectations, leading to growing concerns about future economic consequences for the US.
As a result, Bitcoin reacted to the news by dropping in value to $94,000, creating uncertainty among traders. At the moment, Bitcoin is still uncertain whether it will continue to drop below its current levels or if it will rebound and begin growing again. Experts note that such short-term price fluctuations are typical for a volatile market, especially amid economic instability.
However, some analysts argue that the rise in inflation may ultimately benefit Bitcoin and other cryptocurrencies in the long run. In a high-inflation environment, investors may look for alternatives to traditional assets like the dollar, thus increasing demand for digital assets like BTC, which many consider a hedge against inflation.
Cryptocurrency Market: Instability or New Opportunities?
In conclusion, it is evident that the current events in the US economy, the launch of cryptocurrency funds, and the strengthening of institutional investors’ positions in Bitcoin ETFs point to a growing interest in cryptocurrencies and their role in the global financial system. Despite the recent fluctuations in Bitcoin and other crypto assets, there is confidence that cryptocurrencies will remain a key part of the global economy in the long run.
It is likely that in the coming months we will witness new interesting moves from major financial institutions that could further advance cryptocurrency technologies and increase the broader adoption of cryptocurrencies in global markets.
