As expected, the U.S. Federal Reserve raised interest rates on Thursday morning in Asia, but this did not dampen the optimism that most of its work to suppress inflation might be over. In response, Bitcoin (BTC) and cryptocurrency prices broadly rallied, with BTC up 0.8% to $29,470 and the CoinDesk Market Index, a broad measure of crypto prices, gaining 1.2%. We are already in a risk-off environment, said Lex Sokolin, managing partner of Web3 investment fund Generative Ventures. 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.
The larger crypto market moved firmly into positive territory, with Origin Protocols’ OGN token up nearly 20%, Compound’s COMP up 13%, Stellar’s XLM up 11%, and Solana’s SOL up 8%. 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. Fed Chair Jerome Powell said, “We can afford to be a little patient, as well as resolute, as we let this unfold. 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.”