Bitcoin Pushes to $105K After Fed’s Move on Interest Rates
- Bitcoin surged past $105,000 after the Fed paused interest rate hikes, boosting confidence.
- Fed held rates steady at 4.25-4.50% after 3 consecutive cuts, signaling economic strength.
- Powell’s positive crypto remarks and calls for clearer regulations fueled Bitcoin’s rally.
Bitcoin (BTC) jumped above $105,000 on Thursday as investors’ confidence rose after the Federal Reserve announced it would not raise interest rates. At first, Bitcoin dropped to $101,800 when the Fed announced it, but then it rose to its highest point in three days. The action is taken in response to the latest monitoring policy decision by the Federal Reserve.
Fed Holds Rates Steady
The Fed did not change the benchmark interest rate in its FOMC meeting but kept it at 4.25-4.50%. This was after three successive reductions in the federal funds rate since September this year.
Federal Reserve Chairman Jerome Powell said the ongoing inflation and robust economic performance justified the measures. Although inflation has considerably decreased from the peak of 9.1% in the year 2022, it still stands at 2.9% annually, which makes the future path of rate cuts quite uncertain. Powell’s comments helped improve the market’s mood as the price of Bitcoin rushed to $103,000 and then went even higher.
Support for Crypto Regulation
Powell’s positive remarks on the digital currency sector influenced the price of Bitcoin in the market. He noted that U.S. banks can provide services to crypto businesses if they mitigate the inherent risks. Moreover, Powell suggested that Congress should give out more specific guidelines, which most in the crypto community welcomed as a good sign toward better regulation.
Related: FOMC Meeting: Will Rate Cuts Boost Bitcoin’s (BTC) Price?
The wider market for cryptocurrencies also reacted positively to the Fed’s actions. Ethereum (ETH) increased by 3.29%, trading at $3,225, and Solana (SOL) gained 4.09% to trade at $240.88, data from CoinGecko showed. These gains show that investors are hopeful that the current Fed’s approach will be favorable for the digital asset market in the near future.
Since November 2024, the price of Bitcoin has surged over 50%, with the hope of favorable policies that the new president of America, Donald Trump, would implement. Even though Bitcoin rose to an astonishing $109,241 before Trump’s inauguration in January, it has now pulled back. Despite this, many investors still think the current economic situation is bullish for the cryptocurrency’s growth.