By Frances Yue
Bitcoin and ether are trading in different directions on Tuesday, as Federal Reserve Chairman Jerome Powell signaled that the Fed may speed up the taper of asset purchases and it’s time to retire the word “transitory” when describing inflation.
Bitcoin /zigman2/quotes/31322028/realtime BTCUSD +4.40% dropped around 1.7% during the past 24 hours to about $57,354, according to CoinDesk data. Ether /zigman2/quotes/108573964/realtime ETHUSD +8.44% rose about 4.1% during the past 24 hours to roughly $4,638.
“A faster Fed taper and increased rate hike expectations was bad news for Bitcoin,” Edward Moya, senior market analyst at Forex trading platform OANDA wrote on Tuesday notes. “Bitcoin is trading more like a risky asset than an inflation hedge,” Moya wrote.
On the other hand, it seems ether would “make another run towards $5,000 once risk appetite returns,” according to Moya.
Other risky assets tanked following Powell’s remarks on Tuesday. The Dow Jones Industrial Average /zigman2/quotes/210598065/realtime DJIA +1.07% closed more than 650 points, or 1.9%, lower at about 34,484. The S&P 500 /zigman2/quotes/210599714/realtime SPX +1.60% dropped about 1.9%, to 4,567 and the Nasdaq Composite /zigman2/quotes/210598365/realtime COMP +2.41% declined 245 points, or 1.6%, to about 15,538.