[Bitcoin Now] Uncertainty Resolved Amid Anticipated US Interest Rate Hike... Approaching $40,000 Range

[Image source=Yonhap News]

[Asia Economy Reporter Lee Jung-yoon] Although the U.S. Federal Reserve (Fed) raised the benchmark interest rate by 0.5 percentage points, the largest increase in over 20 years, it did not exceed the expected range, leading to an upward trend in the price of the representative cryptocurrency Bitcoin.

According to the global cryptocurrency market tracking site CoinMarketCap, as of 12:29 PM on the 5th, the price of Bitcoin was $39,754 (approximately 50.35 million KRW), up 4.61% compared to the previous day.

Bitcoin prices have been rising since the Fed raised the benchmark interest rate by 0.5 percentage points on the 4th (local time), due to relief that uncertainty has been removed. Additionally, Fed Chair Jerome Powell stated that the possibility of a 0.75 percentage point rate hike at the regular Federal Open Market Committee (FOMC) meeting in June is "not something actively being considered." Previously, when the Fed raised the benchmark interest rate by 0.25% on March 16, risk was alleviated, investor sentiment revived, and Bitcoin prices rose more than 4%.

Joe Orsini, Research Director at Eaglebrook Advisors, explained, "With inflation reaching its highest level in 40 years, the market expected an aggressive tightening schedule," adding, "These expectations were less hawkish than the Fed feared, preparing the way for a not-so-bad rally."

The Nasdaq index, which is technology stock-centered and shows a synchronized trend with Bitcoin prices, also closed higher as the Fed followed the anticipated course. The technology-heavy Nasdaq index closed up 401.10 points (3.19%) at 12,964.86. The Dow Jones Industrial Average rose 932.27 points (2.81%) to 34,061.06, and the large-cap S&P 500 index ended trading at 4,300.17, up 124.69 points (2.99%).

On the domestic front, Dunamu, which operates the cryptocurrency exchange Upbit, reported its Digital Asset Fear & Greed Index at 49.41 on the day, marking a 'neutral' stage. This is a 0.32 increase compared to 49.08 (neutral) the previous day. Dunamu's Digital Asset Fear & Greed Index is divided into stages of 'Extreme Fear (0?20)', 'Fear (20?40)', 'Neutral (40?60)', 'Greed (60?80)', and 'Extreme Greed (80?100)'. The greed direction indicates increased interest in buying by market participants, whereas moving toward fear indicates a fear of asset decline, leading to market exits and a chain reaction of price drops.