Bitcoin Briefly Pops Past $10K as Fed Says Rates May Stay Near 0% Until 2022
By Daniel Cawrey
Bitcoin saw a quick, short-lived run past $10,000 after the head of the U.S. Federal Reserve said Wednesday that interest rates will remain near 0% until the end of 2022 and its bond buying program would continue.
Bitcoin (BTC) was trading around $9,894 as of 20:00 UTC (4 p.m. ET), gaining 1.6% over the previous 24 hours.
At
00:00 UTC on Wednesday (8:00 p.m. Monday ET), bitcoin was changing
hands around $9,783 on exchanges like Coinbase. Its price dipped to as
low as $9,709 at 09:00 UTC (5 a.m. ET) before buying volume picked up,
pushing the price above its 50-day and 10-day moving averages, a bullish
technical indicator.
Speaking
after the Federal Open Market Committee’s two-day June meeting, Chairman
Jerome Powell said the central bank will likely keep interest rates
near 0% until 2022. That sent bitcoin briefly to $10,000 before it
dropped back.
“There
is great uncertainty about the future,” Powell said. “At the Federal
Reserve, we are strongly committed to use our tools to do whatever we
can for as long as it takes to provide some relief and stability to
ensure that the recovery will be as strong as possible.”
Cryptocurrency
stakeholders see the Fed’s announcement of no changes as reason to buy
bitcoin. “Liquidity can’t paper over insolvency,” said Scott Bambacigno,
a vice prescient at crypto exchange software provider AlphaPoint, “When
you are deep in debt, more debt isn’t going to help. The Fed can ‘print
money’ but they cannot ‘print jobs’. Assets like gold and bitcoin
should do well if the economy continues in this direction.”
While
the price did briefly pop, bitcoin’s brief run to $10,000 quickly lost
steam. ”A lot of analysts may be looking for the Fed decision to move
BTC, but It’s important to bear in mind that over a long time horizon
bitcoin remains uncorrelated to traditional markets,” said Aaron
Suduiko, a research analyst for crypto liquidity provider SFOX.
Indeed, the upward trajectories of bitcoin seem totally unhinged from stock indexes like the S&P 500.
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