The price of Bitcoin, the leading cryptocurrency, has managed to reclaim the $105,000 level despite the Federal Reserve's hawkishness.
As noted by cryptocurrency analytics firm Santiment, the market has not been phased by Jerome Powell and the Fed's decision not to cut interest rates.
The fact that Bitcoin is not fully mirroring the performance of tech stocks could be interpreted as a bullish sign.
"The most historic bull cycles in crypto have come when there is minimal reliance on world stock markets," the firm added.
Alex DovbnyaMore hawkishness?
As reported by U.Today, the Fed said that the level of inflation was "somehow elevated."
Chairman Powell reaffirmed the 2% inflation target goal while also noting that the Fed does not have to wait for this target to be reached in order to start cutting rates.
Economist Joseph Brusuelas noted that "overnight index swaps investors are interpreting Powell's comments and presser as hawkish." He added that the probability of rate cuts this year has declined.
Traders now believe that the Fed might not opt for another rate cut until June.
Polymarket bettors currently see the implementation of just two rate cuts in 2025 as the most probable scenario.
There is currently an 82% probability of the Fed holding rates steady after the next meeting that is slated to take place in March.
Powell's bullish comment
However, Powell also stated that banks are "perfectly able" to serve cryptocurrency customers if they manage risks. This remark has likely contributed to the recent price jump after making waves on social media.
Earlier this month, the new U.S. Securities and Exchange Commission (SEC) administration ditched the SAB121, which makes it possible for banks to custody crypto assets with fewer hurdles.
Dan Burgin
Vladislav Sopov