Bitcoin Holds Steady as Federal Reserve Keeps Interest Rates Unchanged
Bitcoin (BTC) remains resilient while other digital coins and stocks experience a drop in value following the expected announcement that the Federal Reserve will maintain interest rates at their current level. According to CoinGecko, Bitcoin is currently trading at over $43,471 per coin, showing a movement of less than 1% in the past 24 hours and an increase of nearly 9% over the week.
The Federal Reserve’s Decision
The US central bank has decided to keep interest rates unchanged for the fourth time in a row. The bank stated that it will assess incoming data, the evolving outlook, and the balance of risks before considering any adjustments to the target range for the federal funds rate. The committee also mentioned that reducing the target range would only be appropriate once they have gained greater confidence in sustainable inflation movement towards 2 percent.
Chairman Powell’s Comments
In a press conference following the statement, Chairman Powell emphasized that the Fed is not planning to reduce interest rates soon. He stated that they need to see more good data and evidence of a sustainable path to 2% inflation before declaring victory. Powell’s comments were perceived as slightly more hawkish than expected.
Impact on Ethereum and Other Digital Assets
Ethereum (ETH) experienced a larger impact from the announcement, with a 1.5% drop in value over 24 hours, currently priced at $2,339. Most of the top 20 digital coins and tokens also saw a minor decrease in value following the news.
Bitcoin’s Independence from US Equities
In contrast to previous trends, Bitcoin did not closely follow US equities this time. Although US equities dropped after the announcement, Bitcoin’s price was already factored in and remained relatively stable. Head of research at CoinShares, James Butterfill, stated that while Powell’s comments were slightly more hawkish than expected, the decline in tech and banking stocks was more dramatic compared to Bitcoin.
The Impact on Stocks and Crypto
After aggressively raising rates to combat high inflation, both stocks and crypto, considered “risk-on assets,” were negatively affected by the tightening measures. The S&P 500 dropped nearly 1%, the Dow Jones Industrial Average decreased by 0.1%, and the Nasdaq dropped by over 1% following the press conference.
Hot Take: Bitcoin Holds Steady as Federal Reserve Maintains Interest Rates
Despite the Federal Reserve’s decision to keep interest rates unchanged, Bitcoin remains resilient with minimal fluctuations in value. While Ethereum and other digital assets experienced a slight decrease, Bitcoin demonstrated its independence from US equities. Chairman Powell’s comments indicated a cautious approach to reducing interest rates in the future. The impact on stocks and crypto markets was noticeable but not as severe as expected. As inflation continues to be a concern, it remains to be seen how these markets will be affected in the coming months.
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