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Bitcoin News Today – Headlines for August 28

  • The Fed wants to keep interest rates close to zero
  • The increase in inflation would only favor Bitcoin, gold, and other safe-haven assets
  • Bitcoin’s price experienced immense turbulence after the Fed’s announcement

Bitcoin News Today – The Fed recently made known its intention to keep interest rates close to zero while they allow inflation to run high in the short-term to support the economy. Shortly after this announcement yesterday, Bitcoin experienced some severe turbulence. The announcement instantly pushed the price of Bitcoin, gold and other safe-haven assets higher, with Bitcoin surging from the lows of $11,200 to the highs of $11,600.

Fed to Keep Interest Rate Close to Zero

As soon as Bitcoin hit that level after the announcement, it started a downtrend and corrected lower. The digital currency returned to its previous lows, and this suggests that investors are not enthusiastic about the near-term implications that high inflation has on the price of Bitcoin.  This is not the first time Bitcoin is reacting bullishly to Fed-related announcements.

In the recent Fed speech, the chairman of the Fed – Jerome Powell – said that the central bank would be allowing inflation to surge higher on an annual basis in the coming months and years. The Fed is taking this action to support the economy that is currently struggling due to the ongoing global pandemic.

Bitcoin (BTC) Price Today – BTC / USD

The chairman described the plan as a “robust updating” of the policy of the Fed, adding that they will allow inflation to run past the standard 2 percent per annum goal that was set in previous years. The Fed made the exact announcement that many economists and analysts were expecting.

Many economists expected the increase in the inflation rate due to the massive increases in government spending, so this announcement did not come as a surprise to many investors. This event does boost the bull case for assets such as gold and Bitcoin, as investors would run to them as a hedge to protect their capital.

Bitcoin’s Price Surges and Plunges after the Fed’s Announcement

Immediately after Powell gave the announcement regarding the new policy of the Fed, the price of Bitcoin surged to the highs of $11,600 before it plunged back to the lows of $11,200. An analyst pointed out that Bitcoin formed almost the same pattern on several occasions in previous months, always based on Fed-related announcements.

The analyst said this is a “fade the Fed” pattern, pointing to a series of charts showing the striking similarities between the candle formations. Despite its near term implication for the price of the benchmark digital currency, there is no doubt that this announcement would shine a light on why it is important to have exposure to hard assets such as Bitcoin (BTC).

Princess Ogono is a writer, lawyer and fitness enthusiast. She believes cryptocurrencies are the future. When she’s not writing, she spends time with her adorable cat, Ginger and works out often.

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