- Bitcoin reached $85,500, its highest level since March 9, as crypto markets responded positively to the Fed’s decision to keep interest rates unchanged.
- Crypto stocks showed gains, particularly mining companies like Bitdeer and Core Scientific, despite both being down significantly from their recent highs.
- Gold hit a new record above $3,050, while some economists expressed concern about Powell’s characterization of tariff-related inflation as “transitory.”
Cryptocurrency markets moved higher Wednesday following the Federal Reserve’s decision to maintain current interest rates between 4.25% and 4.50%. Bitcoin, the leading digital asset, climbed 4.5% over 24 hours to reach $85,500, marking its highest value since March 9.
The broader crypto market demonstrated similar strength, with the CoinDesk 20 index gaining 6%. Ethereum and Solana each advanced 7%, while Ripple‘s XRP token surged 10% after CEO Brad Garlinghouse revealed that the Securities and Exchange Commission plans to abandon its case against the company.
In the crypto-related equities sector, bitcoin mining operations showed particular strength. Bitdeer shares jumped 10%, likely benefiting from recent advances in their ASIC manufacturing technology and Tether‘s increased investment stake, which now stands at 21%. Meanwhile, Core Scientific gained 8%, potentially riding momentum from its main customer CoreWeave’s recently announced IPO plans. Despite these daily gains, investors should note both companies remain significantly underwater from their recent highs, with Bitdeer down 61% since January and Core Scientific having lost 53% since November.
Federal Reserve Chair Jerome Powell struck an optimistic tone during the Federal Open Market Committee (FOMC) meeting, suggesting that inflation driven by tariffs would likely be temporary and that recession risks remained minimal. Traditional markets responded favorably, with the Nasdaq, S&P 500, and Dow Jones all rising more than 1%.
However, not all market observers shared Powell’s confidence. Economist Mohamed A. El-Erian posted on X: “The word — ‘transitory’ — is back at the Federal Reserve as Chair Powell characterizes the price effects of tariffs as a one-off. I would have thought that, particularly after the big policy mistake of earlier this decade and given all the current uncertainties, some Fed officials would show greater humility. It’s simply too early to say with any regress of confidence that the inflationary effects will be transitory.”
Gold continued its impressive rally, establishing a new all-time high above $3,050 after crossing the $3,000 threshold on Tuesday. Callie Cox, chief market strategist at Ritholtz Wealth Management, suggested the central bank was signaling that further rate cuts would likely come at the expense of equity markets. “The Fed is no longer comfortable gliding to neutral as we get closer to their inflation target. I think you can argue that the soft landing is over,” she posted.
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