During the early session on Wednesday, the U.S. Department of Labor announced that the Consumer Price Index (CPI) for May was lower than expected, causing a surge in the crypto market. The price of Bitcoin rebounded to over $70,000, but quickly fell back as the Federal Reserve maintained interest rates and hinted at potentially only one rate cut this year. As of the time of writing, the trading price of Bitcoin was $68,250, with a 1.5% increase in the past 24 hours.
Altcoins performed positively, with most tokens in the top 200 by market capitalization seeing price increases. The relatively new DePIN token Io.net (IO) showed the best performance with a 35% increase, followed by Livepeer (LPT) with a 19.3% increase, and Injective (INJ) with a 12.6% increase. Akash Network (AKT) experienced the largest decline at 10.5%, FLOKI (FLOKI) fell by 7.9%, and MANTRA (OM) dropped by 5.3%.
Currently, the total market value of cryptocurrencies is $2.48 trillion, with Bitcoin’s market share at 54.1%.
The U.S. stock market ignored Powell’s remarks, with the Dow closing down 30 points or 0.09%, the S&P 500 up 0.85%, and the Nasdaq up 1.53%. Nvidia (NVDA.O) closed up 3.5%, Apple (AAPL.O) rose by 2.86%, briefly reclaiming the title of the world’s most valuable company during trading.
The Fed decided to keep interest rates steady today, with expectations of only one rate cut in 2024. Powell stated that while progress has been made with the 2% inflation target, there is currently not enough confidence to cut rates.
Despite the Fed’s decision to maintain interest rates, the global trend is towards rate cuts, and it is only a matter of time before the U.S. central bank follows suit.
Analysts suggest that the volatility in the crypto market may increase in the short term due to the Fed’s decision to keep current rates, with Bitcoin potentially experiencing short-term fluctuations. However, the overall trend may remain positive, especially if the overall economic outlook continues to improve.
Ionic Digital CEO Matt Prusak noted that any substantial decline in Bitcoin could present attractive accumulation opportunities for long-term investors.