Bitcoin Higher Ahead of FOMC Announcement
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Bitcoin (BTC) turned positive Wednesday as traders awaited the Federal Reserve rate hike decision at 2:00 pm today.
The largest cryptocurrency rose 1.9% in the past 24 hours to around $38,931 as of press time.
“Although the Fed is widely expected to increase rates by 50 basis points,” said Jason Deane, analyst at Quantum Analytics, “this is not a given, and any move outside of this is likely to have a disproportionate market impact.”
“Any announcement of reduction of its balance sheet faster than natural expiration of debt will also likely have an impact on markets,” Deane said. “In normal times, we'd expect major indices to fall on the news (or the rumor beforehand) but these are far from normal times and ‘unpredictable’ is the most appropriate term."
“In terms of bitcoin,” Deane said, “We maintain our position that it will stay range bound for the time being, with a long-term outlook remaining bullish."
“Today is set up for huge volatility, as the Federal Open Market Committee (FOMC) meet to announce their decision on how much they will raise rates by,” wrote Marcus Sotiriou, analyst at the U.K.-based digital asset broker GlobalBlock in a newsletter. “This event has led most investors to sell equities and crypto over the past month, as they fear a 50-basis point rate hike, which seems highly likely.”
“This event could be priced in,” Sotiriou wrote. “Although hiking rates is generally bad in these conditions for risk-on assets, U.S. consumer data is strong at the moment, so I remain optimistic that the result of this hike will not be catastrophic and that this FOMC meeting has been priced in."
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“The fact that major financial institutions like WisdomTree are recommending risk-assessed allocations to the crypto space is a very bullish sign for the industry,” Sotiriou wrote.
Ether (ETH) was down 1.02% in the past 24 hours, trading at $2,844.
The S&P 500 was up 0.25% and the Nasdaq was up 0.28%.