Key facts
- The Federal Reserve raised its benchmark rate by 25 basis points to 3.75%-4%.
- Bitcoin traded near $76,300 following the rate hike.
- Zcash jumped as much as 23% to trade near $1,425.
- The broader crypto market capitalization sat at $2.63 trillion.
Bitcoin held steady near $76,300 a day after the Federal Reserve delivered its first interest rate hike since July 2023, a move that had been largely priced in by traders. The Fed lifted its benchmark rate by 25 basis points to a range of 3.75% to 4%, with all 12 Federal Open Market Committee members backing the decision. Traders had priced in a 93% probability of the hike heading into the decision, according to CME's FedWatch tool.
While Wall Street saw declines in the Dow and S&P 500 on Wednesday, and the 10-year Treasury yield had topped 5% earlier in the week, these moves eased by Thursday morning. Higher rates typically make yield-paying assets like Treasurys more attractive relative to non-yielding assets such as Bitcoin and gold, and a hawkish hike can strengthen the dollar, posing a headwind for risk assets. However, Fed Chair Kevin Warsh's message on inflation reassured bond markets, helping to explain crypto's calm. The broader crypto market capitalization sat at $2.63 trillion, with the Crypto Fear and Greed Index at 50, in neutral territory.
Zcash, however, diverged significantly, jumping as much as 23% to trade near $1,425, a multi-year high. Paradigm co-founder Matt Huang disclosed his firm's stake in ZEC, calling the token "a private complement to Bitcoin." ZEC has gained roughly 160% over the past month, outperforming Bitcoin's 18.2% climb in the same period.