Bitcoin Surges 2.1% to $98,000 After Fed Keeps Rates Steady

Bitcoin has surged past $98,000 for the first time in nearly three months, following the Federal Reserve's decision to maintain steady interest rates. The central bank's move to keep rates unchanged, despite mounting pressure from the US President, has provided a significant boost to the cryptocurrency market. The Federal Reserve cited rising risks of higher unemployment and inflation as the primary reasons for holding rates in the 4.25% to 4.50% range.

Federal Reserve Chair Jerome Powell emphasized that while inflation has decreased, it has been above the 2% target for an extended period. He also noted a sharp decline in sentiment among households and businesses, largely due to concerns over trade policy. Despite these challenges, Powell asserted that the economy remains in a solid position.

Bitcoin's price had dipped below $96,000 before Powell's announcement but quickly rebounded, surpassing $98,000 just hours later. This surge comes as the Crypto Fear & Greed Index has returned to "Greed" territory, and spot Bitcoin exchange-traded funds (ETFs) have seen significant inflows since late March.

The decision to hold rates steady was widely anticipated, with data from the futures market indicating minimal odds of a rate cut. The market expects the Fed to gradually reduce the Fed funds rate to 3.6% by the end of 2025.

Network economist Timothy Peterson had previously warned that if the Fed delays rate cuts, it could lead to a broader market downturn, potentially dragging Bitcoin back toward $70,000. However, the recent price surge suggests that the market is responding positively to the Fed's cautious approach.

Bitcoin's momentum has been building, with the cryptocurrency showing resilience in the face of various challenges. The recent price movements highlight the cryptocurrency's sensitivity to economic policies and geopolitical events, as well as its potential for significant gains in a stable economic environment.