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Highlights
- Bitcoin’s price rose above US$49,000 after the US Federal Reserve announced its decision to double the tapering amount.
- Cryptocurrency investors closely followed the Fed’s monetary policy meeting.
- Ethereum also rose to just over the US$4,000 key level.
Bitcoin’s price rose above US$49,000 after the US Federal Reserve announced its decision to double the tapering amount and signalled towards three interest rate hikes in 2022. The popular cryptocurrency which was in the negative zone just before the announcement may have quickly moved upwards on expectations that a faster withdrawal of the stimulus might offer it an extra headwind.
At the time of writing, Bitcoin was trading up 4.5% at US$49,020.20, according to data from CoinMarketCap. In December, the world’s largest cryptocurrency fell by 15%.
Cryptocurrency investors closely followed the Fed’s monetary policy meeting. These investors consider the cryptocurrency a hedge against the likely debasement of the US dollar that might result from the monetary stimulus.
Bitcoin’s prices zoomed after the Fed’s announcement at 2 PM ET (19:00 UTC). It clearly showed that traders might have been concerned about more aggressive stimulus withdrawal and faster interest rate hikes in 2022.
In addition, global crypto market capitalisation rose 4.3% to 2.23 trillion, according to CoinMarketCap data.
Other than Bitcoin, the other major cryptocurrency, Ethereum, also rose to just over the US$4,000 key level.
Source: © Aoutphoto | Megapixl.com
Powell on cryptocurrency
While answering a question at a post-event press conference, Fed Reserve chair Jerome Powell said that even as the government agency should consider monitoring developments in the cryptocurrency space, cryptocurrencies are currently not a financial stability concern for US markets.
Earlier too, Powell has shared his concerns about cryptocurrency, while adding that he was not for banning the assets. However, he voiced the need for the regulation of stablecoins.
Meanwhile, Fed officials have intensified their moves to control rising inflation by turning their focus to accelerate the tapering of its asset-buying program. The Fed on Wednesday announced its decision to double taper amount to US$30 billion. The US central bank also expects to raise interest rates 3 times in 2022.
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