4 Cryptocurrencies to Watch After Jerome Powell’s Jackson Hole Update

The current US benchmark interest rate for massive overnight money market loans from the central bank is in the range of 5.25 to 5.5 percent.

When Powell spoke in Jackson Hole, Wyoming, on Friday, markets expected further signals of an impending wave of rate cuts. Instead, he went a step further and explicitly spoke in favor of rate cuts. In fact, he said it was not a question of whether there would be rate cuts, but how deep they would be:

“It is time to adjust policy. The direction is clear and the timing and pace of rate cuts will depend on upcoming data, the evolving outlook and the allocation of risks.”

How it could affect cryptocurrency prices

Lower interest rates and a rising dollar supply could drive up crypto prices for blockchains with supply-capped token economies. Some digital assets correspond to inventories that have fixed all-time supply caps. In a low-interest dollar environment, they can become valuable commodities.

Tom Porcelli, chief US economist at PGIM Fixed Income, said:

“I don’t think the Fed has anything to fear from inflation. At this point, it’s right that the Fed is now focusing more on labor than on inflation. Its policy is designed for inflation that is much higher than this.”

In addition, the Bureau of Labor Statistics released a revision to first-quarter job growth that showed there were one million fewer jobs than the previous estimate. Weaker labor markets combined with falling consumer prices give the Fed the ability and incentive to make drastic cuts in interest rate cuts.

This will provide the economy with a more abundant inflow of cheaper credit for business growth, which will also benefit automated, blockchain-managed Web3 businesses.

Unlike the U.S. dollar and other central bank currencies, the following four cryptocurrencies have hard supply caps that limit their expansion. Some crypto investors like this because it means increasing dollar amounts can increase support for their prices.

1. Forever: Bitcoin (BTC)

Like interest rates and industrial energy prices per kilowatt hour, Bitcoin price is always on the radar for crypto traders. The groundbreaking and class-leading cryptocurrency has been such a huge success largely because it offered incentives through a limited supply.

The dollar is plummeting
Now negative for the year pic.twitter.com/7ALO0Y7wo9

— Tom Crown (@TomCrownCrypto) 21 August 2024

If the Federal Reserve soon returns to a regime of rate cuts – what observers call a “dovish” Fed as opposed to a “hawkish” Fed with rate hikes – the economics of the more abundant dollar supply versus the more expensive Bitcoin supply should become a strong support for the Bitcoin price in the long term, with big short-term gains in a market rally.

2. Build And Build (BNB) – Stay Big

Binance Coin (BNB) is another supply-capped token to keep an eye on when the Fed starts changing interest rates again. BNB is the main token for the Binance ecosystem and offers fee discounts and other benefits.

In addition to being used by traders as the native swap currency on Binance, BNB is also the stem smart contract token for the Binance Smart Chain (BSC), currently known as the Build ‘N’ Build Chain. You can pack a lot of autonomous features into these bad boys.

BNB led the 24-hour gains among the top cryptocurrencies on Tuesday, while Bitcoin, Ethereum, Solana and Dogecoin corrected. Binance Coin prices may soon rise again. Changpeng Zhao, the founder and former CEO of the crypto exchange, will begin serving his four-month prison sentence in a few weeks.

The cryptocurrency remained up nearly 7.5% for the week and 2.4% for the 1-month period on Sunday. For the trailing 12-month period, it is up 165%.

3. Ripple (XRP) connects the world

Ripple (XRP) tokens aim to connect the world, a result of RippleNet’s fast, low-cost, secure and reliable protocols for cross-border corporate payments tailored for banks and institutions.

Since December 2020, XRP has faced headwinds from the SEC lawsuit. But after a growing string of court victories, the long-term and short-term prospects for XRP appear promising.

Ripple prices rose sharply earlier this week and gained strength. Daily trading volume increased by 60% while the asset rose by 4.5% in 24 hours. One analyst recently predicted a possible short-term Market gains until resistance at $0.65.

XRP is still up 6% on the 7-day window and more than 2% on the 30-day chart on Sunday. Year-on-year, it has gained 16%.

It is a supply-capped cryptocurrency. In addition to its commercially marketable use cases, its relative supply to central bank currencies such as the dollar is an important factor in its crypto price in the foreign exchange markets.

4. Cardano (ADA) is changing

With the Cardano Chang upgrade underway and expected to be completed soon, markets could reward the Ethereum alternative by pushing up ADA prices on crypto exchanges.

The Chang upgrade gives token holders more power over the governance of the network. This will increase the value of ADA through more features and benefits, as well as stronger decentralization metadata.

Cardano price led the 24-hour and 7-day gains among top cryptos on Wednesday, recording an 8.6% gain for the week on a 7% daily candle.

Meanwhile, Bitcoin and Ethereum recorded gains of one and a half and one percent respectively for the day, with Bitcoin gaining one percent on a weekly basis and Ethereum price falling 2.5 percent over seven days.

Cardano continued to make gains on Sunday, trading 15% higher than Sunday prices a week ago on August 25. So the upgrade narrative should continue to fuel inflows into the ADA economy from crypto investors reading the news.