The crypto market rose on Wednesday after Federal Reserve Chairman Jerome Powell stated in a speech that December will likely bring a smaller increase in interest rates.
The largest cryptocurrency by market capitalization was trading at $17,102 at the time of writing, a 2 percent increase in the hour following Powell’s speech and over 4 percent in the last 24 hours, according to CoinGecko.
Ethereum, the second-largest cryptocurrency, surged even more, rising by over 6 percent in 24 hours, trading at $1,287.
– The time to moderate the pace of interest rate hikes could come as early as the December meeting – Powell said.
The U.S. Central Bank has raised interest rates by 0.75 percentage points four times this year in an attempt to curb inflation, which is currently at a 40-year high in the U.S. The Fed is expected to raise interest rates by 0.50 percentage points at its last meeting of the year next month.
Crypto has closely followed the stock market this year. Both asset classes are considered risky investments, but crypto is naturally riskier.
With the Federal Reserve’s more aggressive monetary policy in an attempt to control inflation, it has been better to be in safe havens like the dollar, as evidenced by the fact that the DXY (U.S. Dollar Index), which measures the value of the U.S. dollar against a basket of foreign currencies, is up 10 percent compared to December 1, 2021.
However, the U.S. dollar fell on Wednesday after Powell’s speech, while the S&P 500 rose by 2 percent.
