While most other digital coins and stocks dropped following the largely expected news today that the Federal Reserve would keep interest rates where they are, Bitcoin held firm.
Bitcoin (BTC), the biggest digital asset by market cap, is now trading for over $43,471 per coin, according to CoinGecko. That’s a movement of less than 1% in 24 hours. Over the week, it’s up nearly 9%.
The U.S. central bank decided for the fourth consecutive time to keep steady on rate policy.
“In considering any adjustments to the target range for the federal funds rate, the Committee will carefully assess incoming data, the evolving outlook, and the balance of risks,” the bank said in a statement.
“The Committee does not expect it will be appropriate to reduce the target range until it has gained greater confidence that inflation is moving sustainably toward 2 percent.”
In a press conference following the statement, Chairman Powell said that the Fed would not necessarily be slashing interest rates soon, saying, “We’re not declaring victory yet.”
“We want to see more good data,” he said, adding that they needed to “see more evidence that we are on a sustainable path to 2% inflation.”
Ethereum (ETH) was hit harder on the announcement—it’s now down 1.5% in 24 hours, priced at $2,339. Most of the top 20 digital coins and tokens took a bit of a dip on the news.
Bitcoin used to largely move with U.S. equities—which dropped following the announcement—but this time was largely priced in.
Head of research at CoinShares James Butterfill said Powell’s comments were “a little more hawkish than expected” but that the declines in tech and banking stocks were “more dramatic” than Bitcoin’s.
“We believe inflation will turn sticky again in February and March, driven by the continued strength of the labor market, which will delay the chances of an interest rate cut until later in the year,” added Oliver Rust, head of product at economic data aggregator Truflation.
The S&P 500 dropped nearly 1% following the statement’s release; the Dow Jones Industrial Average dropped by 0.1%. And the Nasdaq dropped by more than 1% following the press conference.
The Fed started aggressively raising rates in a bid to try and control 40-year high inflation. Both stocks and crypto as “risk-on assets” were negatively hit by the tightening.
BTC has since become more independent. But other digital assets are seen as more risky.
This article has been updated to include comments from Butterfill. Edited by Ryan Ozawa.