Crypto market prices after Fed rally continue as DeFi, Smart Contract Platform Sectors Star
A day after Federal Reserve Chairman Jerome Powell made unexpectedly less hawkish remarks to accompany the US Federal Reserve’s modest rate hike, most major cryptocurrencies were in the green, with several tokens from the decentralized finance (DeFi) and smart contract platforms sectors assuming the deepest hues.
Among Thursday’s biggest winners, decentralized exchange Uniswap’s original governance token, UNI, rose nearly 4.5% in the past 24 hours to trade above $7.20. Layer 1 blockchain Avalanche’s AVAX token rose nearly 3.4% to recently trade above $22. Altcoins’ gains have been part of a general market rally that followed the Fed’s announcement underlining its commitment to less aggressive monetary tightening.
Ether (ETH), the second largest cryptocurrency by market cap, recently traded above $1,650, up a fraction of a percentage point since the same time on Wednesday.
Bitcoin (BTC) recently traded above $23,560, roughly flat over the past 24 hours, albeit slightly in the red. BTC had been changing hands in a narrow range between $23,700 and $24,200 since the Fed announcement before Thursday’s dip.
The CoinDesk Market Index, which measures crypto market performance, was recently flat after spending much of the day in the green.
Crypto markets’ performance correlated with traditional markets’ rally after the announcement. The tech-heavy Nasdaq Nasdaq Composite and the S&P 500 closed up 3.2% and 1.4%, respectively, a day after Powell said “[the] the process of disinflation” had “started.”
Crypto-exposed stocks also rose: Exchange Coinbase ( COIN ) rose 24%, while MicroStrategy ( MSTR ), the software company with a large bitcoin portfolio, rose 9%. Bitcoin miner Marathon Digital Holdings ( MARA ) was up 6.3%.
Digital asset positivity suggested that “bottom of this [down] cycle is probably in for crypto, and that we are entering something of a recovery phase for this market, Joe Ziolkowski, CEO and co-founder of crypto-focused insurance company Relm Insurance, told CoinDesk.
“Both retail and institutional investors are allocating more and more capital to cryptoassets,” Ziolkowski said. “This trend is likely to continue if it becomes clearer that the explosions that took down FTX, [Terra] and three arrows [Capital] done with.”
Ben McMillan, chief investment officer of crypto asset manager IDX Digital Assets, said bitcoin and the broader crypto market were “early in this bid for risk assets.”
“I wouldn’t be surprised if we see a pause here for crypto while the stock markets ‘pick up,'” McMillan added in an email.
