Bitcoin, Ethereum, Dogecoin Ride Higher On Fed Rate Hike: Why Analyst Thinks All-Time Highs Will Be Elusive For Now

Major coins spiked Wednesday evening after the U.S. Federal Reserve announced the first-ever interest rate hike since 2018, as the global cryptocurrency market cap rose 1.4% to 1.75 trillion over 24 hours.

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Why It Matters: The Federal Reserve raised the target fed funds rate by 0.25% on Wednesday to between 0.25% and 0.5%. All 11 members voted unanimously in favor of the rate hike.

U.S. stock futures remain little changed at press time. The Nasdaq ended the day 3.77% higher at 13,436, while the S&P 500 gained 2.24% to 4,358 on Wednesday. 

Cryptocurrency traded in the green, with 10 of the largest coins by market cap trading in the positive territory at press time.

“Bitcoin was able to recapture the $40,000 level after Fed Chair Powell signaled monetary policy was going to get restrictive for the U.S. economy, sending the dollar sharply lower. Bitcoin remains stuck in its $37,000 and $45,000 trading range, and that should remain the case over the short-term,” said Edward Moya, a senior market analyst with OANDA.

Cryptocurrency trader Michaël van de Poppe said the markets reacted well to the interest rate decision and that the hikes were “less heavy.”

Financial market data and content platform Santiment tweeted on the close correlation between risk assets such as equities and cryptocurrencies. 

Pseudonymous analyst Kaleo tweeted that there was a “solid chance" the apex coin could break higher short term out of the $40,000 range. They said it is likely that calls for new all-time highs are “around the corner.”  However, it is unlikely those levels would be seen yet. 

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