Bitcoin soared ahead of the Federal Reserve’s last interest rate decision of the year while the U.S. dollar has erased much of its 2022 gains.
Bitcoin was trading at $18,080 at 10:53 a.m. ET ahead of the Fed’s decision — its highest level since mid-October.
Ether continues to trade above $1,300, having jumped above the level following Tuesday’s inflation figures. Altcoins were less buoyant. Ripple’s XRP was up just 0.6% in the past day, while Cardano’s ADA rose just 0.2%
The Fed is expected to opt for a 50-basis points rate hike today, bringing the overall interest rate to 4.25-4.5%, said David Stritch, an analyst at Caxton. “This would bring the interest rate to its highest level since 2008 — not good news for the stumbling U.S. housing sector, but hope may be on the horizon,” he added.
Yesterday’s inflation numbers gave hope for a quick fall in the inflation rate, Stritch added, before saying that this will allow “the Fed to take its foot off the windpipe of the U.S. economy in the second or even first half of 2023.”
Beyond the interest rate decision, analysts and investors will look to the Fed’s dot plot for clues as to where the committee sees rates going next year.
The U.S. dollar tumbled following the inflation news and the Fed slowing the rate of increases today could send it lower. The U.S. Dollar Index fell to its lowest point since June yesterday, reaching 103.58. Bitcoin typically trades higher when the dollar is weaker.
DXY chart by TradingView
Crypto stocks
U.S. stock indices traded higher today, with the S&P 500 and Nasdaq 100 each gaining 0.6%.
Coinbase gained 4.3% to trade above $40. COIN shares reached an all-time low on Tuesday amid ongoing concern over the fallout of FTX and the firm’s weakening revenue.
Silvergate shares recovered some of the past week’s losses. Shares in the crypto bank were up almost 2%, trading above $19.
Block shares were trading at $72.3, up 1.8$, and MicroStrategy jumped almost 3% to $207.
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Source: https://www.theblock.co/post/194891/bitcoin-trades-around-18000-u-s-dollar-sinks-as-all-eyes-are-on-the-fed?utm_source=rss&utm_medium=rss