Crypto Rebounds From Post-Fed Sell-Off, Investors Shake Off Regulatory Concerns

Cryptocurrency prices jumped on Thursday, as investors digested the outlook for the Federal Reserve’s rate hiking campaign and the ongoing crisis in the banking system.

The price of bitcoin rose more than 4% to $28,290.71, according to Coin Metrics. Ether added nearly 5% to trade at $1,822.50.

Crypto rose with other risk assets. All three of the major stock indexes were higher on the day following their Fed-induced sell-off in the previous session.

Traders were digesting the latest update from the central bank’s Wednesday meeting and “reconciling uncertainty with opportunity,” said Sylvia Jablonski, CEO and chief investment officer at Defiance ETFs.

On Wednesday the Fed increased rates another 25 basis points, as expected, and implied that the end of its inflation fighting hikes could be near an end. Still, stocks and crypto sold off by the end of the day.

“The Fed did what the market wanted and suggested that ongoing rate hikes may not be needed and acknowledged the deflationary work that the recent bank collapses would contribute towards inflation reduction,” Jablonski said. “A fed that is looking to pause should spell positive momentum for risk and growth assets like tech stocks and crypto. … In short, uncertainty remains in monetary policy, and the impact of rates on the economy in terms of whether or not we see a recession.”

The market also appeared to be shrugging off bad news about the “unhealthy regulatory environment,” in crypto. Late Wednesday Coinbase received a Wells notice from the Securities and Exchange Commission, warning the company that it may have violated securities laws. On Thursday the SEC issued an investor alert on crypto assets.