The much-discussed Federal Open Market Committee (FOMC) meeting commenced on Wednesday with no changes to the interest rates. The crypto market opened in green after the news. The Fed also announced it would double the rate of its bond tapering i.e accelerate the reduction of its monthly bond purchases.
Starting in January, the Fed will buy $60 billion in bonds per month, half of what it was buying before the November taper and $30 billion less than it was buying in December.
Fed Chairman Jerome Powell said:
“Supply and demand imbalances related to the pandemic and the reopening of the economy have continued to contribute to elevated levels of inflation,”
The FOMC meeting in the wake of the highest inflation in the US in four decades was expected to announce new measures. The meeting was also being seen as quite crucial for the crypto and Bitcoin market and market pundits called it a “Buy The News” event. As expected the crypto market responded in green after the Fed’s latest set of announcements.
Bitcoin (BTC) recovered above $48,000 and currently trading at $48.823 while Ether (ETH) also managed to rise above $4,000 after consolidating under it for the past few days. Apart from these top two cryptocurrencies, the rest of the crypto market also rallied in green.
Can rising inflation give the crypto market another bull run?
The rising inflation is troubling governments around the globe. The U.S consumer inflation rose to a four-decade high in November followed by the UK that saw the highest inflation in ten years. The central banks around the globe are looking to introduce new measures, but the new COVID variant added with untapped money printing by the governments is expected to make inflation worse.
During these difficult times when the mainstream market takes a backseat amind fear, crypto rise to new highs. This was evident at the start of the year as well when the second wave of COVID has paralyzed nations as well as financial markets, but crypto rose to new highs.
Crypto market pundits predict that Bitcoin will become a primary inflation hedge especially after a great surge in institutional adoption throughout this year.