Cryptocurrency prices, led by the flagship Bitcoin (BTC), have positively responded to an anticipated interest rate increase by the U.S. Federal Reserve. This maneuver resurrected optimism, recently propelling BTC up by 0.8%. The surge reached a high of $29,673, as tracked by the CoinDesk Bitcoin Index. Positivity rippled throughout the crypto market as The CoinDesk Market Index, reflecting a general cryptocurrency price measure, logged a 1.2% gain.
Simultaneously, Ethereum blockchain’s cryptocurrency, Ether (ETH), also experienced a 0.5% rise. Notwithstanding these advances, Bitcoin’s current numbers are considerably lower than the $31,800 peak recorded in July, demonstrating a heightened resilience to macroeconomic events that previously caused substantial price variations.
Such circumstances, according to Lex Sokolin, Managing Partner of Web3 investment fund Generative Ventures, “doesn’t change the story related to crypto.” Despite existing in an economically conservative climate, the perceived situation wouldn’t radically change unless escalated by a war or recession. In this context, the realms of technology and finance maintain a consistent condensed valuation.
Sokolin sees the potential for “a few more rate hikes” but believes that the hardest aspect – navigating through the Covid supply chain disruption and linked subsidized money creation – is now behind us.
In harmony with these developments, many alternative cryptocurrencies, or altcoins, maintained or amplified their gains. For instance, Origin Protocols’ OGN token made headway with a near 20% rise. Compound’s COMP, Stellar’s XLM, and Solana’s SOL saw increases of over 13%, 11%, and 8%, respectively. On the contrary, Dogecoin (DOGE) recorded a 4.3% slump, surrendering part of its prior day’s double-digit profits.
Equity markets presented a mixed bag, with the Nasdaq Composite and S&P 500 reflecting a mild downtrend, while the Dow Jones Industrial Average sustained its longest daily winning run in six years. Observers are now speculating on the possibility of an additional interest rate hike in the near future.
Fed Chair Jerome Powell noted a level of patience, alongside resolve, as the situation continues to evolve. He conveyed the Fed’s readiness to maintain policy at restrictive levels and stated their willingness to raise further if deemed necessary. Sharing a common sentiment with the crypto community, it’s worth noting that any headway comes with its fair share of challenges and fluctuation. The crypto world, like the Fed, may just have to practice a little patience.
Source: Coindesk
