Is the Fed's fault for the bitcoin crash?
Bitcoin has lost all correlation with the U.S. stock market since about mid-May. Since May 13, the S&P 500 stock index is up 7%, then the bitcoin exchange rate has fallen by half.
On May 11, he met with Brian Armstrong, the founder of the cryptocurrency exchange Coinbase, according to Powell's recently released May meeting schedule. Coinbase had listed on the Nasdaq exchange the month before.
Notably, Powell met with Armstrong in person at the time, not remotely through Zoom, as most of his meetings do. Also present at that meeting was former White House speaker Paul Ryan. It is unknown what they talked about, writes ttrcoin with reference to ZeroHedge.
The next day, May 12, the Fed chief met with former Commodity Futures Trading Commission chairman Christopher Giancarlo. His schedule listed him as the head of a private initiative to develop a digital dollar.
Armstrong tweeted May 14 about his trip to Washington, but did not say a word about his conversation with Powell. He said he met with "members of Congress and heads of various federal agencies" throughout the week.
Anyway, May 12 is the day when bitcoin began its sharp decline from $58,000 and after eight days was around $30,000. The decline was then attributed to a May 12 tweet by Elon Musk about Tesla stopping accepting bitcoins.
Nevertheless, in light of the newly discovered facts, market participants are beginning to wonder what the Fed chief said to the Coinbase CEO, after which bitcoin experienced the largest rate crash since December 2017.
Coinbase, a cryptocurrency exchange founded in 2012, is used by more than 56 million individuals from 100 countries. As of the end of March, it had $223 billion in assets in circulation.
The continued growth of cryptocurrencies could be dangerous for Coinbase because speculators holding assets for further growth do not make transactions, which deprives the exchange of trading volumes and therefore commissions.