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Bitcoin price fluctuates on Fed Chair Powell's testimony, India clarifying position

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Yahoo Finance's Jennifer Schonberger details the latest price action in bitcoin amid Tuesday events.

Video transcript

KARINA MITCHELL: Welcome back to Yahoo Finance. Well, Bitcoin wavering today on Fed comments about a tapering timeline. That as India's former Finance Secretary dismissed the notion that cryptocurrencies in the country will be banned. Here with more is our Jennifer Schonberger. And Jennifer, Bitcoin was higher on that India news before Chair Powell's comments, right?

JENNIFER SCHONBERGER: Yeah, good afternoon. Bitcoin kind of toeing that line between gains and losses today after Federal Reserve Chair Jay Powell said he's looking at winding down those bond purchases every month at a faster pace, as risk assets sell off. Take a look at a chart of Bitcoin for the day today. The largest cryptocurrency hit 59,000 and change this morning before falling back after comments from the Fed chair and now kind of making a comeback, coming back again. Before Fed Chair Powell spoke, Bitcoin got a bid after India's Finance Minister said it's not looking to ban crypto, squashing reports that there was legislation to ban privately issued crypto in India. Again, that off the table.

Craig Johnson, chief market technician for Piper Sandler, tells me he thinks that the new omicron variant in Europe could further pressure growth there, spilling over into the US. And while Fed Chair Powell says he's looking to speed up that taper, Johnson tells me ultimately, he thinks the Fed will dial that back, which will offer Bitcoin a bid. He says Bitcoin's got a shot at hitting a new all-time high before year end. Now, Fed Chair Powell making those comments this morning before the Senate Banking Committee, where Treasury Secretary Yellen also testified she endorsed stablecoins as part of the payment system, but says they should be regulated. Take a listen.

JANET YELLEN: I believe that stablecoins can result in some greater efficiencies in the payment system and could contribute to easier and more efficient payments, but only if they're adequately regulated.

JENNIFER SCHONBERGER: Now, these comments coming after the president's working group on financial markets, which Secretary Yellen chairs, has recommended that only banks be allowed to issue stablecoins. Treasury Secretary Yellen was asked by the ranking member of the Senate Banking Committee, Senator Pat Toomey, a Republican, whether that should be the only way that all stablecoins are regulated. She replied that because they have the potential to be used as part of the payment system and because of their structure of being tied to a Fiat currency, that makes them fall under the purview of a depository institution that's guaranteed. Guys.

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