Digital gold and many other crypto assets fell on the evening of April 29 after the Federal Reserve decided to keep interest rates unchanged.
The Federal Open Market Committee (FOMC) voted eight to four in favor of maintaining the rate in the range of 3.5% to 3.75%.
The regulator pointed to persistent inflationary pressures due to rising global energy prices and warned that the situation in the Middle East creates a "high level of uncertainty" for forecasts.
In the first hour after the announcement, Bitcoin dropped from about $76,200 to around $75,000, then rebounded to $75,760.
Ethereum, Solana, and XRP continued their decline, which had started earlier that day.
Not the Main Factor
The decision to hold rates was largely anticipated: the CME FedWatch tool showed nearly a 100% probability of a pause the day before. Several analysts believe that the Fed's decision is not currently the main driver for Bitcoin's price.
"The key catalyst for Bitcoin right now is not the FOMC, but the CLARITY Act," said Theo Iggi Ioppe, Chief Investment Officer, in a conversation with The Block.
According to him, the bill makes the infrastructure around Bitcoin more accessible for banks. It formally designates the first cryptocurrency as a commodity under the jurisdiction of the CFTC, eliminating the risk of excessive SEC intervention and allowing banks to hold the asset without excessive capital requirements.
The bill is progressing through Congress, but contentious provisions—particularly those regarding stablecoins and ethical issues—are hindering its passage.
The analyst also noted the upcoming earnings reports from the "Magnificent Seven" companies—Alphabet, Amazon, Meta, and Microsoft—as a short-term factor for risk assets, including Bitcoin.
It’s worth mentioning that Tudor Investment founder Paul Tudor Jones called the first cryptocurrency the best hedge against inflation.