Bitcoin’s price fell sharply after Fed Chair Powell warned about the economic impact of President Trump’s tariffs, leading to stagflation fears. The price dropped approximately 2.5%, settling at $83,700. U.S. stocks, particularly the Nasdaq, also fell significantly in response to Powell’s remarks, indicating a broader impact on financial markets.
On Wednesday afternoon, Bitcoin’s price fell sharply after Federal Reserve Chairman Jerome Powell expressed concerns regarding the economic impact of tariffs implemented by President Trump. Powell warned that the current tariff increases are significantly larger than expected, potentially leading to stagflation—a combination of high inflation and stagnant economic growth reminiscent of the 1970s.
Following Powell’s remarks, Bitcoin experienced a rapid decline, dropping approximately 2.5% within minutes and settling around $83,700, marking a 1.5% decrease over the previous 24 hours. This decline followed a brief period of rallying, during which Bitcoin approached the $86,000 mark.
The stock market reacted similarly, with U.S. equities facing downward pressure. Notably, the Nasdaq index fell by 3.4%, reaching its lowest point for the session as investors reacted to the foreboding economic outlook presented by Powell. This synchronicity in market behaviour highlights the interconnectedness of cryptocurrencies and traditional financial markets during periods of economic uncertainty.
