Crypto investors and traders may rightly be scratching their heads at the price action in Bitcoin (CCC:BTC-USD) today. Indeed, the moves investors are seeing in the Bitcoin price today are emblematic of the volatility cryptocurrencies continue to experience.
Leverage-driven momentum rallies in cryptocurrencies such as Bitcoin are not that uncommon. However, given Bitcoin’s status as the largest cryptocurrency by market capitalization, some investors may have been banking on less volatility over time. Today, Bitcoin gained $1,400 in just under an hour.
This sort of daily move isn’t necessarily out of the ordinary. Indeed, crypto investors have seen much larger moves in the past. However, investors looking at what may be driving this rapid increase in Bitcoin’s price today may be left scratching their heads.
Let’s dive into the major catalyst that’s moving markets today.
Fed Speech Driving Upside in Bitcoin Price Today
Today, Bitcoin, along with most risk assets, are seeing a significant tick to the upside as investors price in commentary from the Fed. Today, Chairman Jerome Powell of the Federal Reserve gave his first speech at the annual Jackson Hole symposium. This speech is one of the most scrutinized of the year, culminating in analysts and investors updating their projections for equities based on how accommodative (dovish) or restrictive (hawkish) the Fed will be with monetary policy.
Today, reports are that Jerome Powell’s speech was “uber dovish.” This has understandably spurred a rally in risk assets, in a rapid manner.
Despite calls for Powell to give a firm timeline on when tapering would begin, he didn’t. This left the door open to the possibility that bond purchases may continue longer than expected. Many analysts and experts were expecting asset purchases to taper off as soon as next month.
Accordingly, the potential for the existing easy money policies to continue has led speculators to smash the bid today. Most high-flying stocks are seeing gains, with Bitcoin included among this group.
Where Bitcoin goes from here remains to be seen. However, today’s price action suggests retail investors remain confident in the near-term outlook for cryptocurrencies. Accordingly, there appears to be risk-on sentiment building in the markets today.
On the date of publication, Chris MacDonald did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.