SINGAPORE – Bitcoin hit the highest since August as investors interpreted Federal Reserve chair Jerome Powell’s comments about progress on inflation as a sign that a less harsh monetary policy backdrop lies ahead.
The largest cryptocurrency rose as much as 2.4 per cent and was trading above US$24,000 after the market opened in Singapore amid wider crypto gains, including a 3 per cent climb in second-ranked Ether. A gauge of the top 100 digital assets has added 37 per cent this year.
A range of investments from stocks to bonds and crypto pushed higher after Mr Powell said the disinflationary process is under way. He did not push back aggressively on a rally in global markets this year that has loosened financial conditions, which can make it harder to temper price pressures.
He was speaking after the Fed downshifted as predicted to a quarter-point interest rate hike. Mr Powell said policymakers expect to deliver a “couple” more rate rises before putting their aggressive tightening campaign on hold.
“Cryptocurrencies are rallying on risk-on sentiment after dovish comments from the Fed overnight,” said Ms Cici Lu, founder of Venn Link Partners, a blockchain adviser. She added that she has detected more purchases by institutional clients in recent weeks.
Digital assets are rebounding from steep losses last year, a period pockmarked by blow-ups like that of the FTX exchange.
“Usage, adoption and innovation remain a much more positive picture than (what) pricing and investor sentiment were reflecting,” said Mr Richard Galvin, co-founder of fund manager Digital Asset Capital Management. BLOOMBERG