So much for concerns about federal monetary policy, greater regulatory activity, and financial instability. A day after bitcoin fell after a disappointing – to some observers – U.S. Federal Reserve interest rate hike, investors sent the largest cryptocurrency by market capitalization back above $28,000, around where it stood earlier in the week when hopes were high for a halt to central bank hawkishness.
Bitcoin was last trading at around $28,393, up 3.8% in the last 24 hours. Even at that level, the market had retreated from loftier air nearing $29,000 earlier in the day. Bitcoin has increased by almost 22% this month and by more than 65% since January 1.
“The cryptocurrency ecosystem is under assault.” All of these regulatory and enforcement efforts are visible, but so is the banking crisis, which has stretched to banks that support the crypto industry.” GSR Markets’ global head of product, Benoit Bosc, confirmed this to CoinDesk TV. “As a result, you have this opportunity to qualify for the majors.” Bitcoin has profited the most from these developments, and it has rallied dramatically since they began. This was the case with the Fed’s decision yesterday to not only refuse to contemplate any cuts, but also to pause in the cycle of raises.”
Markets reacted negatively to statements made by Fed Chair Jerome Powell and US Treasury Secretary Janet Yellen on Wednesday, according to Bosc. Powell stopped short of guaranteeing that the Fed would not raise interest rates again, which some Fed critics blamed for recent banking calamities, and Yellen refused to guarantee that all bank deposits would be protected in the event of a more widespread sector collapse without Congressional approval. Following that, risk assets of practically every kind plummeted, sucking up cryptos.
“The first reaction is tied to all risk assets; it’s a little leg down,” Bosc explained. “But then, you know, you have that store of value, digital gold feature of bitcoin, which is that there is still inflation.” They are fighting it, yet it remains.
“Bitcoin has a finite quantity, therefore that’s a better alternative,” he added. You’re also having problems with steady currencies. As a result, bitcoin appears to be more stable and secure than others at the present.”
Ether, the second most valuable cryptocurrency by market capitalization, was currently trading at $1,810, up 4.6% from the same time on Wednesday. Several big cryptocurrencies were mostly in the green, reclaiming ground lost the day before. The stablecoin XRP and TRX, the token of the blockchain-based platform Tron Network, have lately increased by 5.7% and 9.4%, respectively. TRX fell the prior day after the SEC charged its founder with selling and airdropping unregistered securities, fraud, and market manipulation. Litecoin maintained its recent upward trend, climbing 7.8%. The CoinDesk Market Index, which measures the overall performance of the market, was up 4.2%.
Misdeeds continued to shock the business as Terraform Labs CEO Do Kwon was charged with fraud by federal authorities in New York just hours after he was arrested by Montenegrin police. The SEC informed Coinbase on Wednesday that it was launching an enforcement action against the exchange.