Bitcoin surged above $67,000 following reassuring comments from the Federal Reserve, while Ether rebounded from concerns about regulatory scrutiny. Additionally, Dogecoin experienced a significant increase in value.
Federal Reserve policymakers, maintaining their stance for three potential rate cuts by year-end, eased market worries of a more aggressive approach.
Crypto markets reacted strongly, with Bitcoin aiming for $67,000 on Wednesday. This surge came as Federal Reserve Chair Jerome Powell adopted a dovish tone, reaffirming the central bank’s expectation of three rate cuts this year, despite inflation figures exceeding expectations.
Bitcoin hit a daily high of $67,781, marking a more than 10% recovery from earlier levels. Meanwhile, Ether erased its 6% decline triggered by reports of regulatory inquiries, including a confidential inquiry into the Ethereum Foundation and consideration by the U.S. Securities and Exchange Commission of classifying Ether as a security.
Among major cryptocurrencies, Dogecoin, Litecoin, and Bitcoin Cash led the gains, likely fueled by the revelation of Coinbase’s plan, posted weeks earlier on a U.S. regulator’s website, to offer futures contracts on these assets. The broad-market CoinDesk 20 Index (CD20) rose nearly 3% over the past 24 hours.
Traditional markets also saw gains, with the S&P 500 index reaching a fresh all-time high, up nearly 1%, and the tech-heavy Nasdaq-100 gaining 1.3%. The U.S. dollar index (DXY) dropped nearly 0.7% from its session high, indicating increased risk appetite among investors.
Digital asset prices had experienced a sharp correction in the past week, with Bitcoin suffering its largest daily loss since the FTX collapse in November 2022. Market participants had become risk-averse ahead of the Federal Reserve’s decision, fearing that recent inflation reports might deter rate cut plans.
However, the Federal Open Market Committee (FOMC) concluded with policymakers maintaining interest rates and rate cut plans, eliminating the risk of a more hawkish scenario that had weighed on asset prices.
Powell, speaking at a press conference, noted progress in reducing inflation despite higher readings. Analysts interpreted the Fed’s stance as maintaining a dovish inclination, providing further support for asset prices.
