Crypto Market Reacts Positively Moving Past $1 Trillion Post the Fed Rate Hike
On Wednesday, February 1, the US Federal Reserve announced a 25 basis points rate hike - the first one for the year 2023. The rate hike was on the expected lines leading to a cheer on Wall Street during yesterday’s trading session.
With the latest hike, Fed has slowed down a bit from its half-point increase in December, giving a nod to investors that the central bank would ease off its aggressive tightening campaign.
The cheer on Wall Street speed across the crypto market as well with the Bitcoin (BTC) price shooting up by more than 4% and surging past $24,000 on Wednesday. As of press time, Bitcoin is trading at $23,792 and a market cap of $458 billion.
The recent rate hike of 25 basis points served as a confirmation of slowing down of Fed’s aggressive monetary tightening policy and provided the much-needed catalyst for the crypto market to rally. Soon after FOMC’s meeting the crypto market added over $40 billion to investors wealth ultimately surging past the $1 trillion mark.
Along with Bitcoin, the broader crypto market and altcoins also rallied. The world’s second-largest cryptocurrency Ethereum jumped by more than 6% moving closer to $1,700. As of press time, ETH is trading at $1674 and a market cap of $204 billion.
Along with Ethereum (ETH), other altcoins are also doing great. Binance’s native crypto BNB Coin is trading up by 6.5%, Cardano (ADA) is up by 6%. Solana (SOL) is up 6.3%, Polkadot (DOT) is up by 7.01%, and Polygon’s MATIC has gained the most with 13.2% gains.
Since the beginning of the year 2023, both - Bitcoin and altcoins - have been doing exceptionally well. This year, BTC and ETH have gained more than 40% each while some of the altcoins have rallied to the tune of 80-100%.
During yesterday’s FOMC meeting Fed Chairman Jerome Powell stated that inflation is now on a downward trajectory in the world’s largest economy. “We can now say, I think for the first time, that the disinflationary process has started […] we see it really in goods prices,” he added.
This would mean that the Fed might not need to take an aggressive step with future rate hikes. But Powell said that rate hikes could continue this year until they meet their targeted inflation of under 2%.