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29 Sep, Thursday
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Bull Trader USA

Crypto: Bitcoin, ether spikes despite Fed eyeing 3 rate hikes in 2022

Major cryptocurrencies spiked on Wednesday after the Federal Reserve said it would speed up tapering of its bond purchases so that the program would end in March, and penciled in three hikes of the benchmark interest rate next year.

Bitcoin jumped from around $47,800 to more than $49,000 after the Fed decision came out at 2 pm ET New York time. The cryptocurrency is recently trading at around $48,078, up 2.2% over the past 24 hours.

Ether rose to around $3,985 from $3,810 after the decision was published. It is recently trading Wednesday afternoon in New York at $3,922, up 3.6% from the past 24 hours.

Read: Fed accelerates taper of bond-purchases, eyes three interest rate hikes in 2022

The crypto market may have already priced in the Fed’s acceleration of tapering though. Bitcoin has fallen more than 25% from its all-time high of $68,991 in November. Ether is down more than 15% from its record high of $4,865.6.

Some traders earlier expected a rally in major cryptocurrencies if the Fed turned less hawkish than the market expected. “We’ve been in a risk-off environment in bitcoin and the crypto asset broadly over the last month, so if the FOMC (Federal Open Market Committee) meeting doesn’t make blockbuster headlines that could be a buying opportunity for those on the sidelines,” Louis LaValle, managing director at crypto fund manager 3iQ Digital Assets told MarketWatch via email. 

Also read: U.S. stocks punch higher after Fed decides to speed bond tapering pace, pencils in 3 rate hikes next year

“As bitcoin and the crypto market continues to mature and institutionalize, Fed regimes and macro events can have a greater impact on near term price discovery,” LaValle said.

Read more: The crypto market is uneasy about the Fed meeting and high inflation. Here’s why

Subscribe to MarketWatch’s weekly crypto newsletter Distributed Ledger.

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