Analyzing the Impact of the Latest FOMC Meeting on Bitcoin and Cryptocurrency Markets
The post Analyzing the Impact of the Latest FOMC Meeting on Bitcoin and Cryptocurrency Markets appeared first on Coinpedia Fintech News
The Federal Reserve’s decision for May is finally out. Today’s FOMC meeting led to the decision to maintain interest rates unchanged. Undoubtedly, the cryptocurrency community has expressed optimism of market revival.
Continue reading to delve into the implications of the Federal Open Market Committee (FOMC) meeting on May 1st, 2024, examining its impact on Bitcoin prices and broader financial markets.
The FOMC’s Stance on Interest Rates
In today’s FOMC meeting, Jerome Powell announced the decision to hold steady the interest rates at 5.25%-5.5%.
Although there has been anticipation of interest rate cuts which could have stimulated economic growth, the Fed has reiterated its commitment. Presently, the Fed is focusing on achieving a more stable inflation rate closer to the 2% target than the current 3%, which Powell terms as “undesirable.” before considering lower rates.
This FOMC meeting’s main concern was about inflationary pressures despite some easing in recent months.
Cryptocurrency Market Response
Following the FOMC announcement, the cryptocurrency sector experienced a flurry of activity.
One of the most popular and leading financial market analysis firms, Santiment, commented on today’s FOMC meeting. As per Santiment, “many in crypto were hoping for this May 1st decision by the US #Fed to result in interest rate cuts, which would in turn bolster equity market caps, and cryptocurrencies by association.”
However, it does not mean that the market is not happy with the present decision of the Fed. The announcement to maintain interest rates was followed by a notable relief bounce in crypto prices.
Santiment highlighted that “many altcoins have enjoyed some breakouts immediately after the news, as traders begin to feel more comfortable making speculative #buys again now that this month’s decision is behind them.”
Bitcoin’s Price Movement and External Factors
Bitcoin’s price showed a tremendous downslide due to market anticipation and fear before the FOMC meeting held today. Bitcoin’s price had dropped to as low as US$56,600 but slightly recovered to US$57,708 post-announcement of maintaining interest rates.
Bitcoin’s current volatility in prices has coincided with several market events such as the launch of spot Bitcoin and Ethereum ETFs in Hong Kong and the recent Bitcoin halving event, along with market anticipation for the Fed Rate’s impact on Bitcoin price movement.
Nonetheless, one of the biggest traditional finance providers, Standard Chartered has predicted a significant rise in Bitcoin’s price to US$150,000 by the end of this year, indicating strong confidence in the cryptocurrency’s future.
Although experts are cautious about the short-term volatility in the cryptocurrency markets but everyone expects long-term growth. The unchanged rate decision indirectly supports the market by maintaining the status quo, allowing investors to adjust without the panic of rising rates.
Also Check Out : Crypto Market Turn Bearish As “Sell in May and Go Away, Got Real,” Bitcoin To Fall Near $47k
