The cryptocurrency market experienced a meteoric rise on Wednesday as the U.S. Federal Reserve maintained its projected path of three interest rate cuts by year-end. This dovish stance from the central bank alleviated investor fears of a more hawkish approach, fueling a surge in risk appetite.
Bitcoin led the charge, rocketing past the $67,000 mark to hit a daily high of $67,781 – a remarkable over 10% rebound from earlier levels. Ethereum also staged an impressive recovery, shrugging off a 6% dip sparked by regulatory concerns.
Other major digital assets like Dogecoin, Litecoin, and Bitcoin Cash witnessed substantial gains, buoyed by oinbase">Coinbase’s plan to offer futures contracts on these cryptocurrencies. The broad cryptocurrency market, as measured by the CoinDesk 20 Index, witnessed a nearly 3% upswing over the past 24 hours.
Traditional markets also rallied, with the S&P 500 and Nasdaq-100 hitting new highs, while the U.S. dollar index declined, signaling heightened risk appetite among investors.
Before the Fed’s decision, crypto markets had endured a steep correction due to fears that stubbornly high inflation could prompt a more hawkish response from the central bank. However, Fed Chair Jerome Powell affirmed their progress in taming inflation, reassuring markets of the central bank’s dovish inclination.
Market analysts hailed the Fed’s stance, with one expert stating, “Fed expects slightly higher inflation but not enough to derail their dovish inclination. Up only.”
The crypto market’s euphoric reaction underscores the significant impact of central bank policies on digital asset prices and highlights investors’ renewed risk appetite in response to the Fed’s accommodative stance.
