Bitcoin extends rally as back-to-back negative GDP prints may prompt Fed to ease rate hikes

Bitcoin (BTC-USD), ethereum (ETH-USD) and other major cryptocurrencies are extending their huge rallies seen after Federal Reserve chair Jerome Powell on Wednesday hinted that the pace of rate hikes could be slower as economic growth slows. As of around 12:45 p.m. ET, bitcoin (BTC-USD) is jumping 10.5% to $23.8K after earlier hitting a session high of $23.94K. And ether (ETH-USD) is soaring 16.1% to $1.72K in early Thursday afternoon trading after reaching an intraday high of $1.74K. The extended gains come after real GDP in the U.S. entered negative territory for the second straight time in Q2, contracting 0.9% vs. -1.6% in the first quarter. The back-to-back negative readings are commonly referenced as a "technical recession." While recessions are not a desirable outcome, bad news is good news in this case as speculators' expectations of future interest-rate increases ease given looming recession fears. Nevertheless, Powell emphasized during his press conference Wednesday that "I do not think the U.S. is currently in a recession," as the economy is still adding jobs. Specifically, markets are pricing in 74.0% chance that the Fed will lift its target rate by 50 basis points at its Sept. 20-21 meeting, according to CME's FedWatch tool. That would be a slower move than the Fed's most recent hike of 75 bps to bring down inflation. As for the bullish price action in cryptos, "you could argue this show of optimism reflects the vie...