Physical Address
304 North Cardinal St.
Dorchester Center, MA 02124
The Federal Reserve kept interest rates steady at 3.5% to 3.75% on Tuesday, giving exactly what markets expected but falling short of traders’ expectations. Bitcoin fell 4% to $71,417. Ethereum changed to +6.48%. XRP lost 3.66%. The entire crypto market shed $2.44 trillion in value as a result of macro, geopolitical, and unique exchanges that took place in one session.
What the Fed Really Said
The FOMC statement agreed that economic activity continues to grow rapidly, that labor productivity remains low, and that inflation remains high. The committee also noted rising economic uncertainty and placed the Middle East conflict as an additional factor with uncertain implications for the US economy.
Ten of the eleven members who voted supported the no-change vote. The only challenger came from Stephen Miran, who was favored to be quartered in the conference. One of these disagreements is worth noting: even within the committee, there is now an apparent split on whether prices should drop soon.
The committee’s language was cautious and non-committal. It can monitor incoming data and adjust if risks arise. It remains firmly committed to returning inflation to 2%. What it didn’t provide was a clear signal that rate cuts were coming soon, which is what markets have been hoping to hear.
Why Crypto Crashed Before The Election
The Fed’s comments hit a market that was already under pressure from several sources.
Earlier in the session, the US February Producer Price Index came in at 0.7% versus 0.3% expected, marking its biggest monthly gain in a year. The warmer-than-expected reading backed off expectations for a rate cut and strengthened long-term interest rate issues weighing on risk.
At the same time, reports of an Israeli strike on South Pars, Iran’s largest gas field that supplies 70% of the country’s domestic gas, sent oil prices above $97 a barrel and cast new political uncertainty on every major market. Gold fell by 2%. Silver is down 2.5%. Crypto followed.
More than $158 million in long positions were wiped out in just four hours, the forced selling expanding what started as a mild correction into something much sharper.
Bitcoin is holding close to $71,000, analysts have found it to be very valuable in the near term. Whether that position works depends on what Jerome Powell says next.
Trust CoinPedia:
CoinPedia has been providing accurate and timely cryptocurrency and blockchain updates since 2017. All content is created by our team of expert researchers and journalists, following strict Editorial guidelines based on EEAT (Effectiveness, Expertise, Validity, Trustworthiness). Each article is checked against the standard to ensure accuracy, transparency, and reliability. Our review policy ensures an unbiased review when we develop exchanges, platforms, or tools. We strive to provide timely updates on everything crypto & blockchain, from startups to industry executives.
Investment Disclaimer:
All opinions and information shared represent the author’s opinion on current market conditions. Please do your own research before making any financial decisions. Neither the author nor the publisher is responsible for your financial decisions.
Offers and Promotions:
Sponsored content and affiliate links can be viewed on our website. Advertisements are clearly identifiable, and our content is not independent of our advertisers.
