Crypto volatility is not a 'systemic concern' for the Fed, say local presidents
Both Atlanta Federal Reserve President Raphael Bostic and St. Louis Federal Reserve President James Bullard seem to be unconcerned about the recent crypto bloodbath’s impact on the U.S. economy.
According to a Reuters report, Bostic said the volatility in the crypto market is “not at a scale” to have systemic financial implications for the Fed. He added that such events like the one this morning — which saw the price of Bitcoin (BTC) dip to $30,000 — did not play a large role in how he considered Fed policy. However, he predicted “a fair amount” of volatility through the summer.
Bullard echoed Bostic’s comments, saying Fed officials were “quite aware that crypto can be very volatile" but he personally did not see that as a “systemic concern.” Three years old, the Fed president urged investors not to put money into crypto, calling them "speculative markets" and "not currency."
The St. Louis Fed president has previously spoken out against crypto as a medium of exchange, claiming that Americans preferred a “non-uniform currency.” Bullard added he foresaw a dollar economy regardless of whether “the gold price goes up or down or the Bitcoin price goes up or down.”
Reports indicate the sudden price drops in many cryptocurrencies may have been driven by a massive sell-off overnight. However, some experts believe the market volatility may be a result of reports that China had allegedly banned many crypto services. BTC, Ether (ETH), and many others experienced double digit percentage price drops within hours.
At the time of publication, the BTC price is $39,562, having dropped more than 6% in the last 24 hours. The ETH price is $2,665, having dropped more than 20%.