"Investors must have calmed down when they see that prices have started to rise, is anyone sad anymore?"
The price of the king of cryptocurrency Bitcoin (BTC) finally managed to rise again above $67,000 after the Federal Reserve (Fed) kept the interest rate from 5.25% to 5.5% as expected during the meeting of the Federal Open Market Committee (FOMC) earlier this morning.
Not only that, the Fed also maintained the projection of three interest rate cuts this year, therefore it has reduced the concerns of the entire crypto market regarding the hawkish stance that the central bank of the United States (US) will take.
However, a "dot plot" of Fed committee members' views on interest rates over the next year showed only one participant expected more than three cuts this year compared to five other members.
Following that, crypto hedge fund QCP Capital said that the price of BTC could fall again if the dot plot sees less interest rate cuts for this year instead of three.
Before the FOMC announcement, most crypto market participants pegged the first interest rate cut on June 2024 but now they put a 70% chance of at least one cut by June.
The decision followed better-than-expected Consumer Price Index (CPI) and Producer Price Index (PPI) reports, sparking concerns that the Fed may keep monetary conditions tight and delay interest rate cuts.
According to digital asset management firm 21Shares on Wednesday yesterday, tighter monetary policy will make investors less interested in financial markets while lower interest rates increase the attractiveness of asset classes such as crypto.
As of this writing, BTC price has surged by 8.25% to $67,869 in the past 24 hours with a market cap of over $1 trillion but is still down 6.82% over the past week.