Bitcoin Pumping on Jerome Powell's Speech but Miners Might Spoil This Rally

Bitcoin is rallying in tandem with gold after U.S. Federal Reserve Chairman Jerome Powell confirmed the central bank's commitment to ramp up inflation.

The bellwether cryptocurrency hit an intraday high of $11,602 at 13:21 UTC on the Bitstamp exchange, adding over two percent since Powell started to speak.

The S&P 500 index also reached a new all-time high while the U.S. Dollar Index (DXY) index plunged.

Fed is pumping Bitcoin

The two percent inflation target implemented by former Fed chair Ben Bernanke is yet to be reached.

From now on, the Fed will allow the level of inflation to surpass the two percent inflation threshold.

The persistent undershoot of inflation from our 2 percent longer-run objective is a cause for concern. Many find it counterintuitive that the Fed would want to push up inflation. [...] However, inflation that is persistently too low can pose serious risks to the economy. Inflation that runs below its desired level can lead to an unwelcome fall in longer-term inflation expectations, which, in turn, can pull actual inflation even lower, resulting in an adverse cycle of ever-lower inflation and inflation expectations.

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As reported by U.Today, BTC also crossed the hard-to-crack $10,000 level for the first time after the Fed announced that it would keep interest rates at 0.25 percent until 2022.

The Fed's historic stimulus efforts meant to cushion the blow from the recession are the most compelling bullish case for Bitcoin.

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Miners are sending millions to exchanges

While the bulls are finally stepping up due to weakening dollars, miners might throw a wrench in their plans.

According to on-chain data firm CryptoQuant, Bitcoin miners have sent 280 BTC ($3.186 mln) to cryptocurrency exchanges over the last few hours.

Miners tend to cash out their coin points to cover their operating expenses. When more coins get sent to exchanges, Bitcoin becomes increasingly vulnerable to further downturns.

BTC is already giving up its gains, currently trading at $11,372.