As an analyst with a background in macroeconomics and experience in following the crypto market closely, I believe that the Federal Reserve’s decision to maintain interest rates unchanged has provided a much-needed boost for Bitcoin and other cryptocurrencies. The persistent inflation worries had been dragging down the crypto market since April, with Bitcoin falling below the crucial $60,000 threshold.
Since hitting a low of under $58,000 on April 30, Bitcoin (BTC) has experienced a significant bounce back. By Friday morning, the digital currency briefly regained the $60,000 mark, suggesting a possible path toward reaching the crucial $65,000 milestone that analysts believe is essential for further growth. This uptick in Bitcoin’s worth can be attributed largely to the Federal Reserve’s announcement of keeping interest rates steady, indicating that they have yet to make sufficient progress in reducing inflation.
Unchanged Interest Rates
On Wednesday, the Federal Reserve communicated that inflation has remained a significant concern in the previous months. They indicated their intention to delay any reduction in interest rates until they become more assured that the rate of price growth is steadily approaching their 2% objective.
The bank’s decision has kept interest rates at their highest point in more than twenty years, fluctuating between 5.25% and 5.5% since last July. By keeping borrowing costs high, the Federal Reserve intends to slow down economic expansion and ease inflationary pressures.
After their most recent gathering, the Federal Reserve made known their choice to maintain their benchmark interest rate around 5.3%.
As a researcher studying the Federal Reserve’s monetary policy, I can tell you that Jerome Powell, the current chair, has made it clear that the central bank’s decisions regarding interest rates will be based on unbiased analysis, irrespective of the upcoming US presidential election.
As a researcher, I would advise against adding extra factors to the deliberation, as this might result in unwanted consequences.
Market Response to Fed’s Unchanged Rates
The Federal Reserve’s recent decision sparked swift reactions in financial markets, including crypto, leading to a slight recovery from previous lows. Presently, the total market value hovers around $2.22 trillion, representing a 3.34% surge over the last 24 hours.
The positive market sentiment has buoyed Bitcoin, witnessing a rise of over 4% in value.
As a crypto investor, I’ve noticed an upward trend in the value of my assets recently. However, it’s important to acknowledge that this growth hasn’t brought us back to previous highs. The crypto asset is still more than 10% below its April peak of $66,000 and has experienced a substantial drop of over 22% since reaching its all-time high of $73,000 in March.
As an analyst, I’ve noticed that the recent surge in the cryptocurrency market isn’t just confined to Bitcoin. other altcoins like Ethereum (ETH) have also experienced positive movements. Specifically, Ethereum has increased by 3.35%, reaching a new milestone of over $3,000 for the first time since Tuesday.
Over the last 24 hours, Solana (SOL), Binance Coin (BNB), Dogecoin (DOGE), and Shiba Inu (SHIB) have shown impressive growth, with increases ranging between 3.4% and 9.34%. This suggests a wider market upswing affecting numerous cryptocurrencies.
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2024-05-03 10:52