Bitcoin remains stable around $76,300 after the Fed's interest rate hike, while Zcash experiences a significant surge.
Key Takeaways
- The Federal Reserve raised its key interest rate by 25 basis points to a range of 3.75%-4% for the first time since July 2023, receiving unanimous support.
- Bitcoin peaked at $76,499 post-announcement but stabilized around $76,300, while the total cryptocurrency market capitalization remained above $2.6 trillion.
- Zcash surged 23% to approximately $1,425 after Paradigm's co-founder expressed confidence in the token as a secure alternative to Bitcoin.
Bitcoin demonstrated resilience, hovering around $76,300 following the Federal Reserve's recent decision to increase its benchmark interest rate for the first time since July 2023. The Fed raised the rate by 25 basis points to a target range of 3.75% to 4%, a move that received unanimous backing from the Federal Open Market Committee's 12 members. Market expectations had indicated a 93% chance of this hike prior to the announcement.
In reaction to the Fed’s decision, Bitcoin initially surged to $76,499 before settling into a stable pattern, with the broader cryptocurrency market maintaining a valuation exceeding $2.6 trillion. Meanwhile, Wall Street experienced a downturn, with the Dow Jones Industrial Average declining by approximately 1.2% and the S&P 500 dropping between 0.4% and 0.5%. This occurred against a backdrop of rising oil prices, which surpassed $100 per barrel amid geopolitical tensions.
The increase in interest rates tends to make Treasury bonds and cash more attractive compared to assets like Bitcoin and gold, thus posing challenges for riskier investments. However, by Thursday morning, some easing of these pressures was observed, with long-term Treasury yields decreasing slightly and equity futures showing signs of recovery.
The overall sentiment in the cryptocurrency market was reflected in the Crypto Fear and Greed Index, which registered a neutral level of 50, significantly down from the extreme greed observed just weeks prior.
Zcash's Remarkable Performance
Notably, Zcash experienced a significant increase, rising as much as 23% to around $1,425 after Matt Huang, co-founder of Paradigm, shared on X that his firm holds a stake in the cryptocurrency and supports its development initiatives. Huang referred to Zcash as "a private complement to Bitcoin," highlighting its potential amidst growing cyber threats and advancements in quantum computing.
Over the past month, Zcash has surged approximately 160%, outperforming Bitcoin, which saw an 18.2% increase during the same timeframe. Zcash's remarkable performance over the past year, with gains nearing 3000%, has positioned it as a leading cryptocurrency in terms of market capitalization.
Other Major Cryptocurrencies
Other cryptocurrencies showed more modest gains, with BNB trading near $724, up 2%, and Solana slightly above $100, reflecting a 3.3% increase. XRP, however, faced challenges, climbing only 2% to $1.29 but down over 6% for the week following the Senate’s failure to pass the Clarity Act, which aimed to clarify the regulatory status of various cryptocurrencies.
In the previous 24 hours, around $373 million in crypto positions were liquidated, predominantly in short positions as prices reacted to the Fed's announcement. Looking ahead, the Fed projects the federal funds rate could reach 4.1% by the end of 2026, with its next meeting scheduled for October 27-28.
