Prices of BTC, ETH, and DOGE rallied after the FED announcement.Investors are choosing the formerly deserted “riskier asset” as the US dollar depreciates in value.
After the release of FED meeting minutes, the prices of major cryptocurrencies like BTC, ETH, and DOGE experienced a spike in price. The minutes were taken at a joint meeting of the Federal Open Market Committees (FOMC) and the Board of Governors. The meeting took place at the offices of the Board of Governors. It began on Tuesday, November 1, 2022, at 10:30 am and continued on Wednesday, November 2, 2022, at 9:30 am.
Attendees of the meeting include veteran economists, analysts, associate directors, top executives, special advisers, and other dignitaries. The conference addressed committee ethics, development in financial markets, open market operations, and US economic and financial situations. Interestingly, the meeting discussions suggest that central banks may increase the lower interest rates.
Price reactions of BTC, ETH, and DOGE following FED minutes release
Apart from major cryptocurrencies like BTC, ETH, and DOGE, the stock market rallied after the FED minutes release. At the time of writing, BTC, the world’s number cryptocurrency, trades at $16,568.92. Likewise, ETH trades at $1,199, gaining a 2.8 percent increase in the past 24 hours.
DOGE, the favorite cryptocurrency of Elon Musk, the world’s richest man, also gained some momentum. The canine-themed cryptocurrency currently trades at $0.082341. Stocks like S&P 500, Dow Jones Industrial Average, and Nasdaq spiked by 0.4 percent, 0,2 percent, and 0.7 percent, respectively. Unfortunately, the US Treasury yields dropped significantly after the FED meeting release.
In recent times, BTC, alongside the whole crypto market, trails after US equities. The behavioral pattern of the digital market occurs because traders consider crypto as a “riskier asset.” In a discussion with Ryan Scott, a veteran trader. He stated:
It seems like this is in line with market expectations. Short-term traders aggressively positioned behind the release driving both crypto and equity index futures briefly,
Why are investors investing in cryptocurrencies?
The FED minutes release has forced investors to invest in risky cryptocurrency assets like BTC, ETH, and DOGE. Most investors are trying to mitigate inflation resulting from the increasing interest rates on the US dollar. Following the release of FED minutes, the value of the US dollar depreciated against the Chinese Yen and European Euro
However, a portion of the minutes indicates a positive outcome for investors. The meeting minutes report that a larger number of participants judged that a slow increase in interest rate would be a better approach.
Commenting on the FED minutes release, Michael Reinking, a senior market strategist at the New York Stock Exchange (NYSE), said:
Looking through the Minutes there is nothing terribly surprising with officials suggesting that slowing the pace of right hikes would allow the Fed to better assess progress towards its goals ‘given the uncertain lags’ associated with monetary policy.
The next FED meeting is scheduled for Tuesday–Wednesday, December 13–14, 2022