Crypto prices over the course of February remained somewhat stagnant, which disappointed many market participants after January kicked off 2023 with a bang, but many leaders are looking to Powell for reasons to be bullish.

In January, many capital allocators were expecting that the trend of diminishing inflation would continue, and some were even hopeful that the Federal Reserve would be able to pivot on their policy of endlessly increasing interest rates.

However, the most recent inflation data suggests that this is not the case, and that in fact interest may have to remain high (as Powell had previously warned) throughout the rest of 2023.

Could crypto prices receive a boost from Powell?

One area of the crypto markets that may perform well in a scenario of rising interest rates is the stablecoin coin market, which has been having a brilliant year thus far.

Companies such as Circle make their revenue from backing their stablecoins with US government bonds, meaning that the higher interest rates, the more money that the company is able to make.

Powell makes it clear interest rates will remain high

However, in the short to medium term the situation does continue to look bearish in the macroeconomic sense, as there is no sign that interest rates will stop rising any time soon.

This ought to be bearish for all asset classes, particularly those that are treated as “risk on”, which crypto certainly is.

Reasons to be bullish

Nevertheless, there are also reasons as to why one ought to be bullish on the crypto markets moving forward, particularly the fact that the Bitcoin halvening is now only a year away.

Interest rates remain high, but inflation also remains high, and for this reason there are many capital allocators that are looking to store value in an asset whose value cannot be inflated away.

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