Bitcoin and Ethereum Rises as US Fed Maintains Steady Interest Rates
Bitcoin rises 3.8% to $42,697.95, Ethereum up 3.6% as the US Fed keeps interest rates steady, boosting the crypto market.
The price of Bitcoin increased by 3.8% recently, as the U.S. Federal Reserve made a decision to keep interest rates steady. Currently, Bitcoin price is at $42,697.95. Ethereum also saw a 3.6% increase, bringing its value to $2,252.
The Federal Reserve has kept the federal funds rate between 5.25% and 5.5% aiming for a 2% inflation and maximum employmentÂ
The U.S. economy is recovering faster than expected, Jerome Powell, the Federal Reserve Chairman, noted. However, he also mentioned that the economy has still not recovered to its initial strength before the COVID crisis, and the future is uncertain.
Investors were expecting the rates to stay the same. The CME FedWatch tool, which predicts changes in rates, showed a 98% chance of this happening.
For crypto investors, the Federal Reserve's action to keep rates low or unchanged is a good sign. When interest rates are low, Investors can borrow money at a lower interest rate, making them more likely to invest in riskier assets like stocks and cryptocurrencies.Â
For example, after the Federal Reserve lowered rates to 0.25% in March 2020, Bitcoin's value shot up. However, in 2022, when the Federal Reserve raised rates to control high inflation, the value of stocks and cryptocurrencies, including Bitcoin and Ethereum, dropped.
