Cryptos Slide Ahead of Fed Minutes and Jackson Hole Speech
Cryptocurrencies and crypto-linked stocks dropped sharply as traders await the Fed’s July meeting minutes on Aug. 20 and Chair Powell’s Jackson Hole speech on Aug. 22. Bitcoin fell 3.2% to below $114,000, ether slid 5.3% under $4,200, XRP tumbled 6.2%, and ADA sank 8%. Mining and exchange stocks like MARA, COIN and MSTR lost up to 7.4%, while the S&P 500 and Nasdaq fell less than 1.5%.
Eight factors argue against a September rate cut: tariff-driven cost pass-through, sticky inflation data, corporate limits on absorbing tariffs, mixed economic signals, policy uncertainty, historical tariff shocks, upcoming forward indicators and internal Fed divisions. Higher-for-longer rate expectations curb liquidity and raise financing costs, deepening the crypto sell-off. Traders will look to Fed minutes and Powell’s Jackson Hole remarks for signals on rate-cut timing.
Bearish
This news is bearish for the crypto market. A hawkish Fed stance, signaled by strong tariff concerns, sticky inflation, and mixed economic data, suggests higher-for-longer rates. History shows Jackson Hole speeches often influence rate expectations and liquidity. In August 2019, Powell’s tone at Jackson Hole lifted markets; conversely, a cautious tone now deepens sell-offs. Short-term, traders will reduce risk, driving prices lower. Long-term, a policy pivot would be needed to restore bullish sentiment and liquidity support.