Market Wrap: Bitcoin and Stocks Rise After Fed Raises Rates; Growth Concerns Ease

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Bitcoin (BTC) rose toward $40,000 during the New York trading day. The price rise offset a brief period of selling immediately after the U.S. Federal Reserve raised its policy interest rate by a half-percentage point, its biggest hike since 2000.

The Fed also approved plans to start reducing its bond portfolio, which will ease monetary stimulus that has contributed to the rise in speculative assets, including stocks and cryptos.

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The Federal Open Market Committee, which sets interest rates, stated that ongoing rate increases within the target range will be appropriate, which suggests another hike could occur at the Fed's meeting next month, albeit likely below 0.75 percentage points as some traders expected.

Rising rates typically precede slowing economic growth, which could weigh on asset prices. Still, during a press conference on Wednesday, Federal Reserve ChairJerome Powell stated that the U.S. economy remains very strong and could handle rising interest rates.

Most cryptocurrencies traded higher over the past 24 hours, tracking moves in stocks. Meanwhile, gold ticked higher as the U.S. dollar declined.

Bitcoin, ether and gold prices are taken at approximately 4pm New York time. Bitcoin is the CoinDesk Bitcoin Price Index (XBX); Ether is the CoinDesk Ether Price Index (ETX); Gold is the COMEX spot price. Information about CoinDesk Indices can be found at coindesk.com/indices.

Embracing risk over the short term

The bitcoin Fear & Greed Index ticked lower into "extreme fear" territory, indicating a lower appetite for risk among crypto traders.

The index has remained in "fear" territory over the past few months, marking a decisive shift in "extreme greed" sentiment in November of last year.

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