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Powell Dismisses QE, Crypto Community Divided

Coin WorldThursday, Feb 13, 2025 7:12 am ET

1min read

The recent Federal Reserve meeting, while anticipated to provide economic relief, has instead sparked debate within the crypto community. Fed Chair Jerome Powell's testimony on February 11th dismissed the possibility of renewed Quantitative Easing (QE), emphasizing that such measures are only considered when interest rates are at zero. He further reinforced the central bank's commitment to ongoing Quantitative Tightening (QT), signaling that any policy shift remains distant.

Powell's stance has sparked intense debate within the crypto community. Some see it as a necessary move for economic stability, while others fear it could delay Bitcoin's next major rally. Macro analyst Alex Krüger posted on X, reiterating Powell's stance and saying, "We are ages away from QE – some people needed to hear this." "No need for QE only for discontinuation of QT." Krüger replied saying, "A few more months to go for that." Echoing similar sentiments, Felix Jauvin, the host of the On the Margin podcast added, "We are entering an economic golden age in my opinion and are less dependent on monetary dominance to keep things together. Again, THIS IS A GOOD THING!"

However, crypto analyst Kelvin offered a contrasting perspective, pointing out that historically, Bitcoin's dominance over the crypto market has never peaked during a period of QT. Unless there is a shift in monetary policy, BTC's market dominance could continue its sideways trajectory. Analysts predict a potential shift in Q2, indicating macroeconomic factors might influence market trends during this period. However, if Fed Chair Powell maintains his current stance on prolonging QT or keeping interest rates elevated, predictions of an imminent "altcoin season" may remain unfounded. This scenario would challenge expectations of a broad altcoin surge, reinforcing Bitcoin's prevailing dominance within the digital asset space.

This event coincided with Powell's semi-annual monetary report to the U.S. Congress on the 12th of February. He reaffirmed that the Federal Reserve was "in a hurry to change its policy stance." Additionally, it coincided with a notable upswing in the broader crypto market. The global market capitalization reached $3.19 trillion, marking a 1.35% increase over the past day. BTC, the leading cryptocurrency, mirrored this trend, trading at $96,009.53, at press time. Bitcoin had a modest gain of 0.04%,

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