On the 30th of November, after Federal Reserve Chair Jerome Powell indicated lower interest rates, the leading cryptocurrencies, Bitcoin and Ethereum, and the broader crypto market increased in value. In a speech, Jerome Powell indicated that December would likely bring smaller interest rate hikes.
After this speech, Bitcoin, the largest cryptocurrency by market cap, increased by over 2% in value. According to data from CoinGecko, It is currently, as of this writing, trading at around $17,102, a 4% increase over the past 24 hours. On the other hand, Ethereum, the second largest cryptocurrency by market cap, increased more than 6% over the past 24 hours, as per data from CoinGecko.
On the 30th of November, in a speech regarding Inflation and the Labor Market, the Federal Reserve Chair said that the time for moderating the pace of rate increases might come as soon as the December meeting. These comments proved to be a blessing for major cryptocurrencies, which soared in value.
This year, the central bank has upped interest rates by 0.75 percentage points four times to get inflation, which is currently at a 40-year high in the US. However, the high inflation is under control, and it is expected that Fed will raise interest rates by 0.50 percentage points in the December meeting.
This year, the broader crypto market has closely followed US equities, because investors largely consider crypto as risk assets. And after the Federal Reserve’s aggressive monetary policy to get inflation in the US under control, the investors avoided risk assets and moved to safe havens, like the dollar.
However, after the 30th of November Fed Chair’s speech, the US dollar plummeted, while US stocks increased, such as the S&P500 jumped more than 2%.