Bitcoin retreats to $77,000s after hawkish Jackson Hole remarks

Bitcoin fell back from the $80,000 level after a hawkish Jackson Hole speech by Federal Reserve Chair Kevin Warsh. As of 7 a.m. on Aug. 29, Bitcoin (BTC) was down 3.43 percent from a day earlier at $77,364, based on Coin360. Ether (ETH) fell 3.08 percent to $2,425 and XRP dropped 5.28 percent to $1.372. Solana (SOL) was down 4.7 percent. BTC dominance held at 59.15 percent.

Warsh set out price stability as the Fed's top priority in his first Jackson Hole symposium speech on Aug. 28 local time. "Summer inflation data came in better than expected, but we cannot say the underlying trend has changed significantly," he said. "It is difficult to define the current financial environment as restrictive," he said.

He stressed that confidence is needed that inflation's downward trend is moving toward the target, "and if not, we have work to do." He said the 2 percent inflation target is "steadfast and non-negotiable." He also cited solid consumer spending and a robust labour market as justification for maintaining tightening.

The market had formed unusual optimism ahead of the speech. After the Treasury announced an expansion of bond buybacks, bitcoin surged from $64,000 to near $80,000. Some analysts even forecast that if Warsh signalled a dovish tilt, bitcoin could break through $83,000 and head toward $90,000 to $100,000. The actual speech was the opposite of those expectations. Spot gold also broke below the $4,500 level immediately after the announcement, plunging 3 percent to its lowest level since Aug. 20.