Powell's Cautious Embrace: Fed Chair Welcomes Crypto, Bitcoin Rebounds

Federal Reserve Chair Jerome Powell has signaled stability for the cryptocurrency market by resisting rushed rate cuts. In a recent speech, Powell stated that banks can serve crypto clients provided they manage risks adequately. This cautious yet open approach to innovation in financial markets has been welcomed by the crypto community.

Powell's remarks come amid concerns about the relationship between banks and crypto firms. The Federal Deposit Insurance Corporation (FDIC) interim Chair Travis Hill recently acknowledged the agency's role in "debanking" crypto firms, raising fears of regulatory hurdles for the industry. However, Powell's statement suggests that the Fed is not interested in terminating legal customers and is open to working with Congress on a greater regulatory apparatus for crypto.

The crypto market reacted positively to Powell's speech, with Bitcoin (BTC) rebounding 3.3% to touch $104,774.44 after initially falling 1.5% following the FOMC's decision not to cut interest rates this month. The Fed's stance on crypto regulation and its resistance to rushed rate cuts have contributed to a sense of stability in the market, despite ongoing geopolitical and economic uncertainties.