Bitcoin Surges to $68k as Fed Holds Rates Steady: Market Optimism Prevails

Bitcoin surges to $68k following the Federal Reserve's decision to hold interest rates steady, sparking a positive market response and renewed investor optimism.

Bitcoin Surges to $68k as Fed Holds Rates Steady

The cryptocurrency market experienced a significant rebound as Bitcoin surged to $68,032 following the Federal Reserve’s decision to maintain interest rates at 5.25% to 5.5%. This move aligned with market expectations and alleviated concerns of a more aggressive tightening of monetary policy.

Market Response to Fed Announcement

Fed Chair Jerome Powell’s anticipated speech triggered a positive response in the crypto market, propelling Bitcoin to near-yearly highs. The broader market also saw a resurgence, with most tokens recording gains ranging from 5% to 15%. Notably, tokens like Pepe and Bitcoin Layer-2 Stacks outperformed, registering gains exceeding 20%.

“The bullish momentum could propel the market to previous highs sooner than anticipated,” said market analysts.

Rate Cut Expectations

The Fed’s decision came amidst concerns over rising inflation indicated by the Consumer Price Index (CPI) and Producer Price Index (PPI) reports. Despite these worries, policymakers maintained their projection for a rate cut within the year, easing investor fears of stringent financial conditions.

Market participants, initially eyeing a rate cut in June, now estimate a 70% probability of at least one rate cut by mid-year, according to CME FedWatch Tool data.

Economic Forecasts and Bitcoin Data

In addition to the rate decision, the Fed revised its economic forecasts, projecting a higher US growth outlook for 2024. The inflation outlook, however, remains a challenge, with core inflation expected to rise slightly.

At present, Bitcoin holds the top position by market cap, trading at $68,002.16 with a market capitalization of $1.34 trillion. The overall crypto market is valued at $2.56 trillion, with Bitcoin dominance at 52.28%.

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Conclusion

The Fed’s decision to maintain rates has injected optimism into the crypto market, driving Bitcoin and other tokens to notable gains. Investors are now closely monitoring the evolving economic landscape for further cues on market direction.