Bitcoin Bounces Over $43K, Altcoins, Crypto Stocks Burst Higher as Fed Projects Rate Cuts Next Year

Bitcoin

(BTC)
bounced
over
$43,000
Wednesday
for
the
first
time
since
Monday’s

flash
crash,
pulling
the
crypto
market
and
shares
of
digital
asset-focused
companies
higher
with
it
as
the
Federal
Reserve
(Fed)

signaled
interest
rate
cuts
for
next
year.

While
the
U.S.
central
bank
officials
left
the
Fed
funds
rate
at
5.25%-5.5%
on
Wednesday
concluding
the
December
Federal
Open
Market
Committee
(FOMC)
meeting,
they
projected
the
rate
would
come
down
to
4.6%
by
the
end
of
2024,
indicating
roughly
three
25
basis
point
cuts.

Bond
yields
and
the
U.S.
dollar
index
(DXY)
fell
sharply
on
the
Fed’s
dovish
projection,
supporting
a
broad-market
rally
for
risk-assets
including
stocks
and
cryptocurrencies.

BTC,
the
largest
crypto
asset,
surpassed
$43,000
by
late
U.S.
afternoon
hours,
climbing
almost
5%
from
below
$41,000
earlier
in
the
day.

Large-cap
tokens
of
Avalanche

(AVAX),
Cardano

(ADA)
and
Injective

(INJ)
posted
near
10%
gains,
making
the
CoinDesk
Smart
Contract
Platform
Index

(SMT)
the
best-performing
among
CoinDesk’s

crypto
sectors.

The
CoinDesk
Market
Index

(CMI),
which
tracks
a
weighted
basket
of
almost
200
digital
assets,
was
up
3.8%
over
the
past
24
hours.

Crypto-related
stocks
also
bursted
higher.
Crypto
exchange
Coinbase
(COIN)
closed
the
trading
session
almost
8%
higher,
while
Michael
Saylor’s
MicroStrategy
(MSTR)
gained
5%.

U.S.-listed
bitcoin
miners
Marathon
Digital
(MARA),
Riot
Platforms
(RIOT),
CleanSpark
(CLSK)
–
often
seen
as
a
leveraged
bet
on
BTC
–
were
up
8%-16%
through
the
day.

“Historically,
a
hold
or
reduction
in
interest
rates
tends
to
inject
optimism
among
investors,
as
it
implies
more
disposable
income
and
potentially
greater
investment
in
various
asset
classes,”
Bitfinex
analysts
said
Tuesday.
“This
effect
is
not
limited
to
traditional
markets
but
extends
to
novel
assets
such
as
cryptocurrencies.”