The global cryptocurrency market is up 4% in the last 24 hours along with smaller gains in the broader equity and bond markets in the aftermath of a Federal Reserve Open Market Committee statement Wednesday afternoon that it would leave interest rates untouched at near zero but expects to raise them soon.
- “With inflation well above 2 percent and a strong labor market, the Committee expects it will soon be appropriate to raise the target range for the federal funds rate,” the central bank’s board of governors wrote.
- The Fed also indicated that with job growth strong and unemployment low, it will continue to reduce its balance sheet and by March expects to cease purchases.
- Bitcoin rose 2% to around US$38,000 in the 24 hours ending Wednesday afternoon. The top 10 cryptocurrencies — with the exception of stablecoins including Tether, US Dollar Coin and stablecoin-related token Luna — were up as much as 6% compared to the prior day.
- Since the Covid-19 outbreak in 2020, investors have turned to Bitcoin as a hedge against inflation, touting its 21 million maximum BTC supply as a safe haven.
- But for more than a month, Bitcoin has underperformed, failing to break through the highly anticipated US$100,000 level to close out 2021, and remaining below the US$40,000 mark for the past week, according to Coingecko data.