Bitcoin hit the highest since August as investors interpreted US Federal Reserve chairman Jerome Powell’s comments about progress on inflation as a sign that a less harsh monetary policy backdrop lies ahead.
The largest token rose as much as 2.4% and was trading at $US24 020 as of 9.35am in Singapore amid wider crypto gains, including a 3% climb in second-ranked ether. A gauge of the top 100 digital assets has added 37% this year.
A range of investments from stocks to bonds and crypto pushed higher after Powell said the disinflationary process is under way. He didn’t push back aggressively on a rally in global markets this year that’s 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. 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 Cici Lu, founder of Venn Link Partners, a blockchain adviser. She added that she’s detected more purchases by institutional clients in recent weeks.
Read: Pick n Pay will soon accept bitcoin at all its till points
Digital assets are rebounding from steep losses last year, a period pockmarked by blowups like that of the FTX exchange.
Read: Ignore the alarmists: bitcoin’s energy consumption is justified
“Usage, adoption and innovation remain a much more positive picture than pricing and investor sentiment was reflecting this,” said Richard Galvin, co-founder of fund manager Digital Asset Capital Management. — Suvashree Ghosh with Sunil Jagtiani, (c) 2023 Bloomberg LP