Key facts
- Crypto majors are trading higher after the Federal Reserve's 25 basis point rate hike.
- Bitcoin reached $76,400, Ethereum was at $2,440, and Solana was at $100.
- Zcash jumped 12% to $1,360, NEAR rallied 18%, LIT gained 14%, and VVV rose 12%.
- The House advanced the American Reserve Modernization Act, requiring Treasury to establish a Strategic Bitcoin Reserve.
- The House Ways and Means Committee advanced the Digital Asset Tax Certainty Act.
- Bitcoin ETFs saw $295 million in net outflows on Wednesday, while Ether ETFs had $224 million in outflows.
Cryptocurrencies experienced a rebound on Wednesday, with major digital assets trading in the green following the Federal Reserve's first interest rate hike since 2023. The Fed increased its benchmark rate by 25 basis points, bringing the target range to 3.75%-4.00%. This move, which was unanimously approved, occurred despite concerns about high inflation.
Following the rate hike announcement and a press conference by Federal Reserve official Kevin Warsh, who described the economy as resilient and the labor market as strong but noted persistent high inflation, the stock market saw an initial sell-off. However, stock futures showed gains pre-market. In the crypto market, Bitcoin briefly dipped before recovering to trade around $76,400. Ethereum and Solana also posted gains, trading at $2,440 and $100, respectively.
Altcoins, in particular, demonstrated significant strength, with several posting double-digit increases. Zcash surged 12% to $1,360, reaching a new high, while NEAR rallied 18%, LIT gained 14%, and VVV rose 12%. This performance suggests that the crypto market may have absorbed the rate hike and previous negative news, such as the failure of the Clarity Act to pass, without significant downturns, indicating a potential risk-on sentiment.
In regulatory news, the House Financial Services Committee advanced the American Reserve Modernization Act, which would establish a Strategic Bitcoin Reserve. Additionally, the House Ways and Means Committee moved forward with the Digital Asset Tax Certainty Act. Both SEC Chair Atkins and CFTC Chair Selig indicated their agencies would proceed with writing rules for digital assets.