Cryptocurrency and related stocks extended their losses on Tuesday as traders supported the release of the Fed’s release of FOMC minutes on Wednesday and approved Chairman Jerome Powell’s Jackson Hole speech on Friday.
Bitcoin has dropped 3.2% in the last 24 hours to below $114,000, while ether has fallen 5.3% to under $4,200. XRP fell 6.2%, Cardano’s ADA slides 8%, and the broader crypto market fell 3.2%. Stocks in crypto companies such as Bitcoin Miner, Cryptocurrency Exchanges and Digital Asset Finance Companies suffered even more losses, with Mara, Coin and MSTR down 5.72%, 5.82% and 7.43% respectively.
In contrast, US stocks generally suffered less. The Dow ended up flat, with the S&P 500 down 0.59% and the Nasdaq slipping 1.46%. The disparity highlights how digital assets, which rely heavily on cheap liquidity, are exposed to changes in rate expectations than traditional stocks.
Investors are currently facing a pivotal calendar. At 2pm on August 20th, the Fed will release minutes from the FOMC meeting held on July 29-30th to provide policymakers with insight into tariff and inflation debates. From August 21st to 23rd, central bankers gathered at the Jackson Hole Symposium, with Powell’s keynote speech set at 10am ET on August 22nd. Together, minutes and Powell’s speech can define market expectations for the September policy meeting.
Customs Delayed Bite
Many companies are absorbing tariff costs to protect market share, but analysts warn that they cannot do so indefinitely. Once handed over to consumers, these costs could raise prices and force the Fed to wait before they cut.
Sticky inflation data
Despite some cooling, the inflation gauge remains rising. The producer price index, the main wholesale measure, is hotter than forecast, suggests sustained pressures that complicate any case for positive mitigation.
Corporate restrictions
US executives have shown that they will ultimately be forced to move tariff costs downstream. If that happens, consumer inflation will accelerate in the coming months, making September cuts appear premature.
Mixed Economic Signals
The US economy shows both slower job growth and resilient consumer demand. This uneven photo could encourage Powell to insist on patience until the Fed has more clear evidence that growth can withstand tariff-driven costs.
Policy uncertainty
Tariffs intersect with fiscal and trade policies in an unpredictable way. That complexity increases the risk of failure and makes it more likely to create a tuxy tone at Jackson Hole.
Lessons from history
The 2018-2019 tariff shocks created delayed but meaningful inflation and encouraged pay. Powell may use that precedent to justify this suppression.
Future outlook indicators
Future releases of fresh economic data, including August preliminary data releases on manufacturing and service activities on Thursday, could indicate the creation of tariff-related cost pressures. Powell was able to point these out as another reason for his prudence.
Internal department
A split within the Fed may become apparent within minutes of the FOMC meeting in July. Powell may highlight the need for consensus as the Hawks highlight their work with a focus on inflation and pigeons.
For crypto, wagers are obvious. Long distance fees curb liquidity that promotes speculative gatherings, increase miners’ funding costs and weigh exchange activities. If Powell warns, it could lead to deepening sales of tokens and crypto-related stocks. But the incredible surprise may provide a rebound spark.
