Bitcoin Reclaims $85k and Stocks Head Higher Despite Analysts Warning of Pain Ahead
Crypto markets are buoyed by recent developments following the Federal Open Market Committee (FOMC) meeting, during which the U.S. central bank decided to keep interest rates steady at 4.25%-4.50%. This decision has contributed to a positive sentiment in the crypto space, marked by a significant increase in Bitcoin’s price, which has surged 4.5% in just 24 hours, now trading at $85,500—its highest level since March 9.
The broader market reflects this enthusiasm, with the CoinDesk 20 index—the benchmark of the top 20 cryptocurrencies—up 6%. Notable performers include Ether (ETH) and Solana (SOL), both seeing a 7% increase, while Ripple’s XRP token enjoyed a 10% spike following CEO Brad Garlinghouse’s announcement about the potential dismissal of the case against Ripple by the Securities and Exchange Commission (SEC).
In the realm of crypto-related stocks, companies like Bitdeer (BTDR) and Core Scientific (CORZ) have experienced notable gains, up 10% and 8% respectively. Bitdeer’s rise is attributed to advancements in its ASIC manufacturing process and additional support from Tether, which has increased its stake in the company to 21%. Core Scientific, primarily engaged with AI firm CoreWeave as its client, is potentially benefiting from CoreWeave’s recent IPO filing, although both companies have seen significant declines in their stock prices since earlier this year—over 61% for Bitdeer and more than 53% for Core Scientific.
In remarks following the FOMC meeting, Federal Reserve Chair Jerome Powell addressed inflation concerns, suggesting that tariff-related inflation might be transitory. However, this assertion has been met with skepticism from some economists. Mohamed A. El-Erian expressed concerns about the Fed’s approach, stating that the reliance on the term “transitory” in describing inflation could be premature, especially given the mistakes of past policy decisions.
In related news, the precious metals market has also seen movement, with gold prices climbing above $3,050 after previously exceeding the $3,000 threshold. Analysts, including Callie Cox from Ritholtz Wealth Management, signal that ongoing monetary policy from the Federal Reserve suggests any future rate cuts might adversely affect stock markets. Cox noted that the Fed appears increasingly uncomfortable with the current trajectory towards a neutral rate as they near their inflation targets, indicating a possible end to the era of ‘soft landing’ for economic conditions.
The evolving dynamics of economic policy continue to bring fluctuations to both traditional and crypto markets, leaving stakeholders to closely monitor future developments as the landscape unfolds.
