• Bitcoin traded above $42,000 after Jerome Powell’s remarks, impacting its price with a drop to $41,870.
• ARK Invest suggests allocating 19.4% in Bitcoin to maximize returns, highlighting its low correlation with traditional assets.

On February 1, 2024, we have a series of events that deserve our attention. Have you been following Bitcoin’s recent fluctuations? This morning, it was trading just above $42,000. The move follows comments from Jerome Powell, chairman of the U.S. Federal Reserve, who tempered expectations of a possible interest rate cut by March.

Powell emphasizes the need for more certainty about inflation stability before considering such a cut. Nick Chatters of Aegon Asset Management notes that, while a cut is not guaranteed in the near term, there is a chance it could happen within this year.

This news has had an impact on the price of Bitcoin, which experienced a drop to $41,870. Although it has shown a gradual recovery, it has yet to reach $43,000, its value at the beginning of the week.

This behavior makes it clear to us how economic policies can directly influence the cryptocurrency market. But what about other digital assets? The CoinDesk 20 Index, which evaluates the performance of the most relevant cryptoassets, has also experienced a decline, with a drop of approximately 1.1% in the last 24 hours.

Switching topics, have you ever wondered what would be the ideal proportion of cryptocurrencies in your investment portfolio? ARK Invest, under the direction of Cathie Wood, proposes in its latest annual report that about 20% would be ideal.

This suggestion is based on analysis of Bitcoin’s performance over the past seven years, which has outperformed other asset classes. According to ARK, allocating 19.4% to Bitcoin in 2023 would have optimized the risk-adjusted returns of any portfolio. In addition, they highlight Bitcoin’s low correlation with traditional assets, which positions it as an attractive option to diversify.

In the cryptocurrency lending sector , Celsius has announced that it will distribute $3 billion in crypto to its creditors as part of its bankruptcy exit process. This distribution will be made through platforms such as Coinbase and PayPal.

Creditors will gain equity in the mining operation of Ionic Digital Inc. which is on track to become a public company. This is an important process for both Celsius and the decentralized finance sector.

We cannot leave aside the case of Alex Mashinsky, former CEO of Celsius, who is facing fraud allegations. Mashinsky has been released on $40 million bail and his trial is scheduled for September of this year. This case highlights transparency and regulation in the cryptocurrency world.

The current cryptocurrency market scenario shows us the complex interplay between economic policies, risk management and the need for proper regulations. These elements not only impact prices, but also shape the future of the financial sector.