Bitcoin spiked higher on Wednesday in the countdown to a speech by US Federal Reserve chairman Jerome Powell that may cement expectations for a slower pace of interest rate hikes.
The largest token added as much as 3.7% and was trading at about US$17 010 as of 10.41am in Singapore, the highest level in two weeks. Ether climbed over 4%, while the likes of Binance coin and dogecoin also jumped.
Powell is due to speak later on Wednesday at an event hosted by the Brookings Institution and may echo fellow Fed officials in signalling a half-point rate rise at their final meeting of the year after four successive 75 basis-point moves. Rapidly tightening monetary policy has been the key trigger of a 63% slump in a gauge of top digital assets this year.
“Overnight, there’s been increasing commentary around the perception that the Fed will raise rates by only 50 basis points,” said Hayden Hughes, CEO of social trading platform Alpha Impact. “Since crypto usually leads other asset classes, we may see equities rally” as the mid-December Fed meeting nears, he added.
Crypto markets have been fairly resilient following a slide lower when Sam Bankman-Fried’s FTX crypto empire tumbled into bankruptcy earlier this month. At the same time, there are worries that more pain may lie ahead as the contagion from the collapse spreads in the digital-asset sector.
Bankman-Fried, who has transformed from industry saviour to corporate villain in the blink of an eye, is also expected to speak on Wednesday. He is scheduled to participate in the New York Times DealBook Summit but via video conference from the Bahamas rather than in person. — Suvashree Ghosh, (c) 2022 Bloomberg LP