Monday, 15 July 2024
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Following the Fed’s rate decision, the cryptocurrency market bounced back

  • The price of BTC dropped to $43,000 for the first time since the flash crash on November 11.
  • The federal funds rate was left at 5.25% to 5.5% by the Federal Reserve.
  • The sector with the best performance on CoinDesk was the Smart Contract Platform Index.

Following the Federal Reserve’s indication that interest rates may be lowered in 2019 and December, the price of Bitcoin (BTC) dropped to $43,000 for the first time since the flash crash on November 11.

The federal funds rate was left at 5.25% to 5.5% by the Federal Reserve, but it is anticipated that it will drop to 4.6% by the end of 2024, signifying approximately three 25-basis point reductions.

Bitcoin

The dovish stance from the Fed caused bond yields and the US dollar index to drop dramatically, which in turn supported a broad rise in risk assets such as stocks and cryptocurrency assets.

After closing the day below $41,000, bitcoin increased over $43,000 in the afternoon, a gain of around 5%. Notable cryptocurrency assets Avalanche (AVAX), Cardano (ADA), and Injective (INJ) saw rises of about ten percent. The sector with the best performance on CoinDesk was the Smart Contract Platform Index (SMT).

Stocks linked to cryptocurrencies also surged, with Coinbase climbing over 8% and MicroStrategy rising 5%. The day saw increases of 8% to 16% for the US-listed Bitcoin mining businesses Marathon Digital, Riot Platforms, and CleanSpark.

Interest rate reductions or deferrals, according to analysts at cryptocurrency exchange Bitfinex, suggest that investors may have more money to spend on a variety of asset classes, including new assets like cryptocurrency assets as well as more established markets.

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