Main Points:
- Fed Decision Boosts Market Sentiment: After the FOMC held the Federal Funds rate at 4.25%–4.50%, Bitcoin rallied 4.5% in the past 24 hours, reaching a high of $85,500—its highest since March 9.
- Broader Crypto and Equity Gains: Major cryptocurrencies, including Ethereum and Solana, saw gains of around 7%, while XRP jumped 10% on positive Ripple lawsuit news. Overall, the CoinDesk 20 Index rose by 6%.
- Mixed Reactions Among Analysts: Despite a positive reaction in crypto and equity markets—with stocks such as the Nasdaq, S&P 500, and Dow Jones all climbing over 1%—some market commentators express skepticism over the Fed’s claim that tariff-induced inflation is merely “transitory.”
- Concerns on Fiscal Policy and Recession Risks: Analysts like Mohamed A. El-Erian question whether it is too early to dismiss inflationary pressures as transitory, suggesting that uncertainty remains in the current economic climate.
- Gold’s New Record: Gold also advanced, breaking past $3,050, signaling continued safe-haven demand amid economic uncertainty.
1. Overview of Recent Market Movements
Following the latest FOMC meeting, the Federal Reserve decided to maintain the Federal Funds rate in the range of 4.25%–4.50%. This decision helped buoy investor sentiment in both traditional and crypto markets. Bitcoin, for example, surged by 4.5% over the last 24 hours, trading at around $85,500—a level not seen since early March.
In addition to Bitcoin’s rally, other major cryptocurrencies also experienced notable gains. Ethereum (ETH) and Solana (SOL) both jumped roughly 7%, while XRP surged by 10% after Ripple CEO Brad Garlinghouse hinted that the SEC might drop its lawsuit against the company. The broader crypto market, represented by the CoinDesk 20 Index (excluding stablecoins, meme coins, and exchange tokens), posted a 6% increase.
2. Stock Markets and Related Assets Respond Positively
The positive sentiment wasn’t limited to digital assets. U.S. equity indices saw significant improvements as well, with the Nasdaq, S&P 500, and Dow Jones each climbing by over 1% in the last trading hour. Additionally, crypto-related stocks such as Bitdeer and Core Scientific saw increases of 10% and 8% respectively. Bitdeer’s gains were partly attributed to recent technological advancements in its ASIC manufacturing and a boost in its stake by Tether, while Core Scientific benefited from its association with AI firm CoreWeave’s IPO application.
3. Diverging Opinions: Caution Amid Optimism
Despite the broadly positive reaction to the Fed’s decision, some analysts urge caution. Fed Chair Jerome Powell’s remarks downplaying the inflationary impact of tariffs as “transitory” have not convinced everyone. Economist Mohamed A. El-Erian tweeted that the emphasis on “transitory” inflation might be premature given the current uncertainties and past policy missteps.
Market strategist Callie Cox from Ritholtz Wealth Management also pointed out that the Fed’s shift toward a more neutral policy stance could indicate the end of a soft-landing scenario, suggesting that while the current recovery is promising, challenges remain ahead.
4. Gold Continues to Climb
Amid the bullish sentiment in both stocks and crypto, gold maintained its upward trajectory, climbing past $3,000 on March 18 and setting a new record above $3,050 on March 19. This continued rise in gold prices underscores persistent demand for safe-haven assets in an environment of fiscal and trade uncertainties.
5. Recovery with Caution
In summary, Bitcoin’s rebound to $85,500 following the Fed’s decision to hold rates reflects strong market sentiment, with broad-based gains across crypto and equity markets. However, despite these positive developments, some market experts warn that underlying economic uncertainties—such as the potential persistence of inflationary pressures—may temper future gains. Investors should remain mindful of these mixed signals as they navigate the evolving economic landscape.
