Today, the Federal Reserve provided the strongest signal yet of an upcoming rise in the interest rate, which will then be the first since December 2018. This provided quite a cold shower for the stock markets, which had been up significantly earlier in the day following strong results by industry bellwethers such as Microsoft Corp. and Texas Instruments Inc.


 ![Jerome Powell looking serious peakd.jpg](https://i.imgur.com/RXNjNPq.jpg)

<center><sup>Jerome Powell somehow managed to shock the market yet again. **Picture by Drew Angerer / AP**</sup></center>

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What's fascinating is how quickly things went downhill within minutes of Jerome Powell, the head of the FED, delivering his statements. If this was crypto, you would know a shitcoin by the way in which a single person could easily cause a pump or dump this way (unless it's Elon).

Looking at the main key indexes, the U turn is quite something:

- Dow Jones was up 1.28%, but ended down 0.38%
- Nasdaq was up 3.32%, but ended up 0.02%
- S&P 500 was up 2.09%, but ended down 0.15%

And the news was not even that surprising. Following record inflation levels, the market had already priced in (presumably) that there would likely be up to four rate hikes of 0.25% each throughout 2022. But the rhetoric and implied urgency became means for more uncertainty and speculation that it could happen even sooner and perhaps in bigger bulks.

One way or the other, people should ask themselves to what extent they want one isolated group of people to have this much power...

# Bitcoin was no exception. For now.

The news had just as significant of an effect on the price of Bitcoin. With Jerome speaking at 20:00 GMT+1, you can see how the price peaked just at the same minute he was going live, only for it to crash within 10 minutes later. Even Justin Sun must be jealous of his ability to pump and dump.

![Jerome Powell Talks down Bitcoin 26012022 2000.jpg](https://i.imgur.com/djJGFnz.jpg)

<center><sup>The price of Bitcoin hit a temporary high the very same minute Jerome Powell went live (20:00 GMT+1), only to crash as soon as the message was made.</sup></center>

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To me, this shows that we're not "early" in crypto like we were in 2017-2018 which also saw multiple rate hikes without seeming to care much. However, it also means that we're not yet where we can and should be, and thus have a long way to go in terms of growth in value.

I think my fellow Norwegian Alex Gladstein said it best in a Tweet:

> Stage 1: Bitcoin too small to react to Fed policy
Stage 2: Bitcoin big enough to react to Fed policy (you are here)
Stage 3: Bitcoin too big to react to Fed policy
>
> -Alex Gladstein on [Twitter](https://twitter.com/gladstein/status/1486379958230421509?s=20)


Building on that statement, I think Bitcoin's care for the interest rate shows another theory that I have. Namely that the bottoms we see on the long-term trend line going steadily up is represented by the growth in adoption and conviction by people who are bringing in the new, while the spiky peaks and valleys on top of it represent the greed and speculation of the old.

As I wrote back in November in an article called [Is Bitcoin no longer the uncorrelated asset that it used to be?](https://leofinance.io/@fredrikaa/is-bitcoin-no-longer-the-uncorrelated-asset-that-it-used-to-be), the influx of institutional money into Bitcoin and crypto will make it more correlated with the rest of the market and macroeconomic picture. If you want the hedge fund's pumps, you'll have to accept their dumps too. But should Bitcoin continue to grow in adoption and value, and the hedger's dumps go into the hands of HODLers with strong conviction, then that influence will vane over time.

But for now, I think the best is to simply buckle up, and see the volatility as the opportunity that it is.

Posted Using [LeoFinance <sup>Beta</sup>](https://leofinance.io/@fredrikaa/imagine-being-able-to-talk-down-the-market-like-powell-just-did)