Bitcoin and Cryptocurrency Prices Rise as Fed Raises Interest Rates
Bitcoin and cryptocurrency prices experienced a rally after the U.S. Federal Reserve raised interest rates. However, this move did not dampen optimism that the Fed’s efforts to suppress inflation might be coming to an end. Despite the gains, bitcoin still remains below its July high and is largely unaffected by macroeconomic events that have caused more dramatic price reactions in the past year.
Key Points:
- Bitcoin (BTC) and cryptocurrency prices rallied after the Fed raised interest rates.
- Bitcoin was up 0.8% to $29,470, while the CoinDesk Market Index gained 1.2%.
- Ether (ETH) added 0.5%.
- The Fed’s announcement does not change the story for crypto, according to Lex Sokolin of Generative Ventures.
- Sokolin expects a few more rate hikes, but believes the hardest work is already done.
The broader crypto market also saw positive movement, with altcoins such as Origin Protocols’ OGN, Compound’s COMP, Stellar’s XLM, and Solana’s SOL experiencing gains. However, Dogecoin (DOGE) saw a drop in price. Equity markets were mixed, with the Nasdaq Composite and S&P 500 slightly down, but the Dow Jones Industrial Average (DJIA) continuing its winning streak. Fed Chair Jerome Powell stated that policy will need to be held at restrictive levels for some time and further rate hikes may be appropriate.
Hot Take:
Despite the Fed’s rate hike, the crypto market remains optimistic with the belief that the worst of the inflation suppression is over. Bitcoin and other cryptocurrencies continue to show resilience and are not heavily impacted by macroeconomic events. The future rate hikes expected by experts may have some influence, but the overall outlook for the crypto market remains positive.
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