Bitcoin (COIN:BTCUSD) slipped to a two-week low on Wednesday, as investors trimmed positions ahead of the Federal Reserve’s Jackson Hole symposium and evaluated geopolitical uncertainties, including potential Russia-Ukraine negotiations.
The largest cryptocurrency traded 1.1% lower at $112,870.0 as of 10:15 ET (14:15 GMT), briefly nearing a six-week low of $112,668 earlier in the session. Last week, Bitcoin had surged above $124,000, but recent strong U.S. economic data dampened expectations for a significant Fed rate cut in September.
Market focus on Jackson Hole and potential Russia-Ukraine talks
Investors are closely watching the Fed’s annual symposium in Jackson Hole, where Chair Jerome Powell is set to speak on Friday. A hawkish tone or indications that undercut bets on a September rate reduction could put further pressure on risk assets, including cryptocurrencies. Futures markets now reflect expectations for a 25-basis-point cut, down from earlier forecasts of a larger reduction.
Geopolitical developments added to market uncertainty. U.S. President Donald Trump hosted Ukrainian President Volodymyr Zelenskiy and European leaders on Monday to discuss possible peace initiatives, mentioning plans for direct talks with both Moscow and Kyiv and hinting at a potential trilateral summit. While successful negotiations could bolster global risk sentiment over the long term, the near-term uncertainty weighed on crypto prices.
Fed’s Bowman supports small crypto holdings for central bank staff
Federal Reserve Vice Chair for Supervision Michelle Bowman stated on Tuesday that central bank employees should be permitted to hold small, “de minimis” amounts of cryptocurrencies and digital assets. She argued this would allow regulators to gain practical experience and improve oversight of emerging financial technologies. Bowman acknowledged inherent risks but stressed that benefits should not be overlooked. Her remarks signal a more hands-on regulatory approach toward crypto under the current administration.
China considers yuan-backed stablecoins
China is exploring a policy shift that could authorize yuan-backed stablecoins, aiming to boost international adoption of its currency, Reuters reported Wednesday. The State Council is expected to review a roadmap later this month outlining global yuan usage targets, regulatory responsibilities, and risk management measures. Senior leaders will also hold a study session on yuan internationalization and the role of stablecoins, likely clarifying policy direction. Beijing sees stablecoins as a tool to extend the yuan’s global influence, particularly as U.S. dollar-linked tokens gain traction internationally.
Altcoins follow Bitcoin lower
Most altcoins also fell on Wednesday, mirroring Bitcoin’s decline. Ethereum slipped nearly 4% to $4,120.40, while XRP dropped 5.5% to $2.82. Solana declined 2.2%, Cardano fell over 8%, and Polygon retreated 6.3%. Among meme coins, Dogecoin dipped 4.5% and $TRUMP slid 3%.
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