Bitcoin Surpasses $29.6K After Fed’s Rate Hike; CoinDesk Market Index Jumps 1.2%

Bitcoin (BTC) and cryptocurrency prices broadly rallied Thursday morning in Asia after the U.S. Federal Reserve – as expected – raised interest rates but, even still, failed to tamp optimism that most of its work to suppress inflation might be over.

BTC was recently up 0.8% versus 24 hours earlier to $29,470. The CoinDesk Bitcoin Index got as high as $29,673 in the aftermath of the Fed’s decision to boost its rate benchmark by 25 basis points. The CoinDesk Market Index, a broad measure of crypto prices, gained 1.2% at press time. Ether (ETH), the Ethereum blockchain’s cryptocurrency, added 0.5%.

Despite the gains, bitcoin remains well off its July high of $31,800 and largely immune to macroeconomic events that over the past year have stirred more dramatic price reactions.

The Fed announcement “doesn’t change the story related to crypto,” said Lex Sokolin, managing partner of Web3 investment fund Generative Ventures. “We are already in a risk-off environment. Things could maybe get more catastrophic with war or recession, but tech and finance are at a fairly stable compressed valuation, with AI perhaps being an outlier.”

Sokolin expects “a few more rate hikes,” but “the hardest work, which was to absorb the Covid supply chain shock and the associated subsidized money printing, is done.”

The larger crypto market moved firmly into positive territory with a number of altcoins maintaining or building on earlier gains. Origin Protocols’ OGN token was recently up nearly 20% versus 24 hours earlier. Compound’s COMP, Stellar’s XLM and Solana’s SOL were up more than 13%, 11% and 8%, respectively. Dogecoin (DOGE) was an exception, dropping more than 4.3%, relinquishing some of its double-digit gains from the previous day.

Equity markets were mixed with the Nasdaq Composite and S&P 500 slightly in the red but the Dow Jones Industrial Average (DJIA) continuing its longest daily winning streak in six years as investors considered the possibility of another rate hike later this year.

“We can afford to be a little patient, as well as resolute, as we let this unfold,” Fed Chair Jerome Powell said in a press conference Wednesday. “We think we’re going to need to hold, certainly, policy at restrictive levels for some time, and we’d be prepared to raise further if we think that’s appropriate.”