The recent decision by the United States Federal Reserve to pause interest rates and hint at possible cuts in the coming year has sparked a wave of optimism among investors, impacting both traditional financial markets and the cryptocurrency market.
Shares of prominent companies in the cryptocurrency sector, such as Coinbase and MicroStrategy, experienced notable increases of 7.8% and 5%, respectively, on the day of the Federal Reserve’s announcement. Additionally, Bitcoin mining company Marathon Digital saw an impressive surge of 12.6%.
This boost in crypto shares is perceived as a reflection of the favorable sentiment generated by the Federal Reserve’s decision. The S&P 500 index, a benchmark for U.S. stocks, increased by 1.37% in response to the announcement. Jeffrey Rosenberg, a fund manager at BlackRock, described this situation as a “green light” for investors and highlighted that this bullish sentiment could persist, depending on new economic data.
The Boost Was Reflected in the Cryptocurrency Market, Which Experienced Strong Bullish Trends
According to data published on CoinMarketCap, here is the evolution of the major cryptocurrencies in the last 24 hours. BTC grew by 1.5% after an adjustment and is priced at $41,990 per unit. ETH reached $2,252 with an increase of 3.10%. SOL managed to surpass $70.6 with a 5.6% increase. DOGE, on the other hand, continues to evolve positively, with a 2.13% increase reaching $0.09536. XRP grew similarly, by 2.1%, and is trading at $0.6202. Interestingly, AVAX had a negative day, falling by 4.75% and is currently trading at $38.08. Finally, ADA is being traded at $0.6317, with a slightly higher increase of 4.5%.
It is also worth noting that the total market capitalization grew by more than 3.8% and is approaching 1.62 trillion.
Lower interest rates could have a side effect on the tokenization of real-world assets (RWA), as investors may shift their focus towards decentralized finance (DeFi), where yields exceeding 10% become more attractive.
Looking ahead, market analysts are monitoring significant events that could further drive the growth of the cryptocurrency market in 2024: the scheduled Bitcoin halving in April. Historically, Bitcoin halving events have been associated with increased attention and potential price surges in the cryptocurrency space. This upcoming halving is expected to be a major catalyst for market growth and could attract both institutional and retail investors. Another key event is the possible launch of a spot Bitcoin ETF in the coming weeks. According to Bloomberg analysts, with a 90% probability, it could be approved in mid-January 2024.
