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Highlights
- Fed’s stance – US banks now permitted to serve crypto clients with risk management.
- Bitcoin rally – BTC (BTC-USD) climbs over $105,000, marking a three-day high.
- Market reaction – Technology stocks face pressure as crypto gains momentum.
Bitcoin (BTC-USD) surged past $105,000 on Thursday, following the Federal Reserve's decision to maintain steady interest rates. This decision came with a noteworthy statement from Fed Chair Jerome Powell, who clarified that US banks can now serve cryptocurrency clients, provided they manage the associated risks effectively. This move has ignited optimism in the digital asset space, pushing Bitcoin’s price up by 3% from its previous dip of $101,800.
The Federal Reserve's announcement signaled a shift towards a more accommodating stance for crypto activities within traditional financial systems. As Bitcoin's price reached its highest level in three days, the broader market reacted with mixed sentiments. Technology stocks, particularly those within the S&P 500 (^GSPC), experienced notable losses, with Nvidia (NVDA) and Microsoft (MSFT) seeing declines of 4.1% and 1.1%, respectively. These losses followed a previous selloff triggered by the launch of cost-effective AI models by Chinese startup DeepSeek, which introduced competition to US-based OpenAI.
The market showed initial negative reactions to the Fed’s announcement, with stocks deepening their losses, particularly the Nasdaq (^IXIC), which briefly dropped over 1% during the afternoon session. However, Bitcoin’s surge continued to gather momentum, as the cryptocurrency market remained buoyed by the regulatory shift and the potential for increased institutional interest in the space.
The Fed's clarification of crypto policy signals a more favorable environment for digital assets moving forward. Bitcoin’s climb above $105,000 underscores its growing influence as a key asset in global markets, with institutions and individuals alike responding positively to the new regulatory clarity. Despite the pressure on technology stocks, the crypto market’s resilience and positive outlook shine through. As Bitcoin continues to break new price barriers, the intersection of traditional finance and digital currencies is becoming more pronounced.
