Bitcoin Surpasses $105,000 as Jerome Powell and the Fed Decide to Pause Interest Rate Cuts

Despite a hawkish outcome from Wednesday’s FOMC meeting, Bitcoin and crypto have remained largely stable, with BTC surging past a crucial level.

As expected, Federal Reserve (Fed) Chair Jerome Powell announced a pause in interest rate cuts on Wednesday as inflation remains above the targeted 2%. He disclosed the agency will maintain the federal fund rate at 4.25% to 4.5%, sparking intense volatility in the equity market.

Bitcoin Plays Contrarian; Here’s What It Means

Following this disclosure, Bitcoin remained largely unperturbed by the somewhat hawkish news. In fact, the pioneering crypto asset gained bullish momentum, surging above $104,000 during Powell’s speech, and now trades at over $105,000 per coin.

However, the US stock market faced downward pressure as investors fled to caution. For context, the S&P 500 and Nasdaq Composite fell 0.5%, while the Dow Jones Industrial Average slipped 137 points, or 0.3%.

Market intelligence firm Santiment highlighted this contrarian play, tying the decoupling to a maturing cryptocurrency sector. It stated in an X post that this is a good sign that Bitcoin has outpaced its earlier status quo as a “high leveraged tech stock” as branded by skeptics.

Notably, Bitcoin has shown a strong correlation with US interest rates in the past five years, reacting accordingly to the Fed’s tone on inflation. This has led to skepticism about Bitcoin’s widely recognized capabilities as digital gold and a hedge against inflation.

Meanwhile, the changing tides highlight Bitcoin’s recent progress. Furthermore, Santiment noted that Bitcoin’s best-performing years came when it relied minimally on the stock market, insinuating bullish momentum for the premier asset.

Banks Perfectly Able to Service Crypto: Powell

A contributing factor to Bitcoin’s bullish momentum is Powell’s signatory that financial institutions can interact with the crypto industry. During Wednesday’s press conference, the Fed chair stated that banks could service crypto firms if they properly decimate risks.

“Banks are perfectly able to serve crypto customers as long as they can understand and service the risks,” Powell said.

He also touched on the debanking myth, insisting that America’s central bank cannot prevent financial institutions from meddling with crypto clients because of the risks associated with the sector.

Interestingly, Powell’s speech followed his earlier comments that the Fed cannot hold Bitcoin as a strategic reserve asset. The chair had also called the asset a digital gold, stating it would compete with the prominent precious metal.

Meanwhile, Bitcoin has surged 2% to $105,167 at the time of writing, with the global crypto market cap rising 2.3% in the past 24 hours to $3.57 trillion.