Jerome Powell's nomination to lead the Federal Reserve next year could disrupt cryptocurrency prices, a prominent crypto analyst said Monday.
Bitcoin, the top cryptocurrency by market capitalization, was down 1.2% to $58,303 at last check. Ether, the cryptocurrency that runs on the Ethereum blockchain, was off nearly 2% to $4,248 and dogecoin was off 2.1% to 22 cents.
Powell was nominated to lead the Fed, President Joe Biden said Monday, with Lael Brainard pegged as vice chairwoman.
Both positions will need to be confirmed by a majority vote in the Senate. The chamber is split 50-50, with the Democrats controlling because Vice President Kamala Harris can break tie votes.
Winston Ma, managing partner of CloudTree Ventures, says Powell may face opposition from progressives in the Senate.
"The potential change of the [Federal] Reserve chairman could mean a significant change to the U.S. monetary expansion policy, crypto regulation, and US digital currency agenda. says Ma, author of "The Digital War - How China’s Tech Power Shapes the Future of AI, Blockchain and Cyberspace."
"All these can disrupt the crypto trading market dramatically."
Meanwhile, David Lesperance, managing partner of immigration and tax adviser Lesperance & Associates, urged investors to chose their cryptocurrency investments carefully, as some cryptos have collapsed or seen their founders indicted.
"As the holidays approach, crypto-enthusiasts should take a few minutes to rewatch the bank run scene from 'It's a Wonderful Life,' and apply its lessons to their own investments," he said.
"Until the regulatory wildfire clears out the underbrush of unstable exchanges, cold wallets may be the modern equivalent of keeping your assets under the mattress."
Separately, Christopher Vecchio, senior strategist at DailyFX, said halving, where the reward for mining bitcoin is cut in half, serves as a way to reduce the pace at which new bitcoin supply is unlocked.
"After each of the first three halving events, bitcoin prices rallied thereafter for about 1.5 years; in each case, bitcoin prices were up sharply relative to their pre-halving value," he said.
"With demand for bitcoin increasing rapidly in recent months, the next halving event – a supply-limiting occurrence – could help revive bitcoin’s upward trajectory, despite losses that have accumulated in recent weeks."
Vecchio added that it "shouldn’t come as a surprise when more calls for 'bitcoin $100,000' come out of the woodwork once the halving event is complete."