Crypto markets rose significantly on Wednesday, with bitcoin (BTC) targeting $67,000 as U.S. Federal Reserve Chair, Jerome Powell, hit a dovish tone as the central bank maintained its outlook for three rate cuts this year despite higher-than-expected inflation figures.
Bitcoin (BTC) reached a day high of $67,781, up more than 10% from levels seen hours earlier. Ether (ETH) erased from a 6% dip earlier in the day that had been triggered by news reports about the Ethereum Foundation facing a confidential inquiry from an unnamed government and the U.S. Securities and Exchange Commission considering classifying the asset as a security.
Dogecoin (DOGE), litecoin (LTC) and bitcoin cash (BCH) led gains among major cryptocurrencies as people finally noticed a Coinbase plan, posted on a U.S. regulator’s website several weeks ago, to offer futures contracts on them. The broad-market CoinDesk 20 Index (CD20) was up nearly 3% over the past 24 hours.
Traditional markets also climbed higher. The S&P 500 index jumped nearly 1% to a fresh all-time high, while the tech-heavy Nasdaq-100 gained 1.3%. The U.S. dollar index (DXY), which measures the strength of the dollar against other major currencies, declined nearly 0.7% from its session high, signaling a greater risk appetite among investors.
Digital asset prices suffered sharply over the past week, with BTC struggling its largest daily loss since the collapse of FTX in November 2022, as market participants turned risk-averse ahead of the Fed’s Wednesday decision, fearing that last month’s stickier inflation reports could deter the Fed’s rate cut plans. Wednesday’s Federal Open Market Committee (FOMC) concluded with policymakers keeping interest rates and rate cut plans steady, removing the risk of a more hawkish scenario that had weighed on asset prices.
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