Bitcoin Price Dips as Fed Chair Powell Signals Tariff Concerns

Bitcoin’s price took a hit today, erasing earlier gains after Federal Reserve Chairman Jerome Powell highlighted the potential economic fallout from looming tariffs on China and other nations.

The cryptocurrency, which had surged past $85,500 earlier in the day, stumbled following Powell’s remarks, reflecting the market’s sensitivity to macroeconomic uncertainties. As investors grapple with the implications of trade policies and monetary policy, Bitcoin’s volatility underscores its role as a barometer for broader economic sentiment.

Powell, speaking to reporters as covered by CNBC, cautioned that a surge in imported goods aimed at dodging escalating tariffs could disrupt gross domestic product projections. With tariffs on China potentially climbing to 245%, the Federal Reserve faces a delicate balancing act between curbing inflation and fostering economic growth.

Powell emphasized that the central bank would evaluate the economy’s proximity to its dual mandates of price stability and full employment before making policy adjustments. His comments suggested that the tariffs could complicate these objectives, potentially pulling the Fed further from its goals. On interest rates, Powell remained noncommittal, noting that the Fed has held rates steady for two consecutive meetings. He signaled that the central bank is prepared to wait for clearer economic signals before altering its stance, leaving markets in a state of anticipation.

Market Reacts to Uncertainty

Bitcoin’s price mirrored the uncertainty sparked by Powell’s remarks. After dipping to $83,000 earlier in the day, the asset had clawed its way back above $85,500, buoyed by renewed investor confidence. However, Powell’s tariff warnings triggered a sharp sell-off, with Bitcoin dropping as markets digested the potential for economic turbulence.

The decline was accompanied by significant liquidations, with nearly $300 million in positions wiped out across exchanges. Over 140,000 traders were caught in the downturn, highlighting the market’s heightened volatility. By the close of trading, Bitcoin stabilized at $84,200, though the day’s fluctuations kept investors on edge.