Bitcoin Surges Past $30K Mark as Federal Reserve’s Outlook Changes
Bitcoin experienced a significant surge on Tuesday, surpassing the $30,000 mark for the first time since June 2022. This notable increase was attributed to market expectations of a more lenient Federal Reserve in the coming months, as well as an overall improvement in sentiment for the crypto space.
Bitcoin Breaks $30k
At the time of writing this article, the world’s largest cryptocurrency had risen by 6.3%, reaching $30,080.76 – its highest within the last 10 months. In addition, Bitcoin also outperformed other cryptocurrencies, with Ethereum increasing by 3.3%, while Binance Coin and Ripple saw gains of 4.6% and 2.3% respectively.
The impressive surge in Bitcoin’s value has propelled the total market capitalization of cryptocurrencies to a staggering $1.4 trillion. This recent upswing in Bitcoin’s value is part of a wider trend in the market, as investors anticipate a limited number of interest rate hikes by the US Federal Reserve in the upcoming months.
This optimism has filtered through to other asset markets, with stocks also experiencing a strong rally on Tuesday. While the Fed is expected to implement at least one more interest rate hike, there are indications that investors are preparing for a potential pause or even reversal in the central bank’s hawkish stance.
The Stance of Federal Reserve
A more accommodative Federal Reserve bodes well for Bitcoin and other cryptocurrencies. As earlier, a sharp uptick in interest rates led to a significant drop of over 66% in the total crypto market capitalization in 2022. This week, the spotlight will be on the consumer price index inflation data and the minutes of the Federal Reserve’s March meeting, offering further insights into the trajectory of interest rates.
Despite concerns about a possible banking crisis, Bitcoin has witnessed impressive growth in the past month, attracting several safe-haven investments. Nevertheless, owing to relatively low trading volumes, there have been notable price swings in the token, especially after its slump in 2022, which dented investor confidence in cryptocurrencies.
The realm of cryptocurrency has been riddled with a string of controversies and insolvencies, resulting in a sense of wariness among investors. Moreover, American authorities have been waging a campaign of regulation against the sector, further unsettling the investors.