The Federal Reserve has decided to maintain the interest rate at 4.25%–4.5%. This decision has resulted in a positive reaction in cryptocurrency markets.
Fed's Decision and Its Market Impact
At the June 18 meeting of the Federal Open Market Committee, the decision was made to hold the benchmark interest rate steady at 4.25%–4.5%. No explicit references to unemployment or inflation pressures were made, which differs from previous statements. Fed Chair Jerome Powell noted ongoing economic expansion without imminent macroeconomic risks highlighted. This steady rate is usually viewed favorably by cryptocurrency markets.
Bitcoin's Rally Following Fed's Rate Stability
Bitcoin (BTC) is currently priced at $104,858.68, with a market cap of $2.08 trillion and a dominance of 64.04%. Its 24-hour trading volume has decreased by 16.29%, while prices have increased by 10.49%. Over the last 60 and 90 days, BTC has seen gains of 22.95% and 24.14%, respectively. Currently, the supply of BTC is near its maximum of 19,879,787 out of 21 million. Historically, when the Federal Reserve indicated a pause in rate hikes, Bitcoin often experienced price rallies.
Crypto Market Prospects Amid Monetary Policy
Insights from Coincu suggest that if the Fed continues its cautious approach without citing further macroeconomic risks, the crypto market could experience increased volatility. Historical trends indicate that such decisions often lead to heightened interest in riskier assets, potentially keeping prices of key cryptocurrencies like BTC and ETH supported.
The Federal Reserve's decision to keep the interest rate steady has created a positive sentiment in cryptocurrency markets, which is expected to continue depending on future monetary policy.
