Key Takeaways
- The price of Bitcoin reclaimed the $85,000 mark on Wednesday after the Federal Reserve announced that it would leave its current interest rate in the 4.25% to 4.50% range unchanged.
- Fed chairman Jerome Powell also dismissed claims that President Trump’s tariff policies would cause a recession, stating that the economic decisions would be “transitory”. The central bank’s move eased market liquidity, leading to a wider market rebound, led by BTC.
- Crypto analyst James Coutts predicted that the Fed’s policy change could result in Bitcoin recording a new all-time high by the end of the second quarter of 2025.
- Spot BTC ETFs have recorded $500 million in net inflows over the past three days following five consecutive weeks of outflows. Experts noted that the positive shift is indicative of Bitcoin’s price stabilization and easing inflationary pressures boosting investor confidence in risk assets.
Bitcoin (BTC) climbed nearly 5% on Wednesday to surge past $85,500 as investors responded positively to the Federal Reserve’s decision to leave interest rates steady at the 4.25% to 4.50% range.
Following the Federal Open Market Committee (FOMC) meeting, the U.S. central bank announced that it would slow the pace of reducing its $6.8 trillion balance sheet, capping the Treasury securities reduction at $5 billion per month, instead of $25 billion. This is aimed at preventing disruptions in the funding market amid ongoing debate about increasing the debt ceiling of the U.S. government.
Bitcoin Price Surges 5% As U.S. Fed Leaves Interest Rates Unchanged, Easing Market Pressures
The Fed also left its interest rates unchanged, cementing its projection to announce two rate cuts later this year. The central bank cut borrowing costs last September for the first time in four years, resulting in sizable gains for both crypto and stocks, which only amplified after President Donald Trump won the election in November. The move helped ease market liquidity, leading to a rebound in cryptocurrencies and stocks.
Bitcoin is currently trading at its highest point since March 9, with its price rising as high as $85,890 on Wednesday. Ether (ETH), the second-largest cryptocurrency by market capitalization is up more than 7% over the same period, with its price moving past $2,000. Meanwhile, the broader crypto market is up more than 3% over the past 24 hours, with its total market cap sitting at $2.91 trillion.
The CoinDesk20, an index containing the top 20 cryptocurrencies by market, is up 6% today. Ripple’s XRP token saw the largest gains over the past day following CEO Brad Garlinghouse’s announcement that the U.S. Securities and Exchange Commission (SEC) is dropping its lawsuit against the company.
The equities and crypto markets had taken a battering earlier this month after President Trump made surprising tariff announcements, which led to investors adopting a “risk-off” strategy that led to a major price correction. However, Federal Reserve chairman Jerome Powell brushed off inflation concerns during Wednesday’s press conference, claiming that the U.S. government’s tariff-related policies will have a transitory effect on inflation and that the risk of recession remains low.
Crypto Analyst Predicts Bitcoin To Register New ATH At The End of Q2 2025
Jamie Coutts, the chief crypto analyst at Real Vision, said the Fed’s policy shifts could set the stage for a significant rally in Bitcoin’s price within the next 90 days. He noted that the market may be underestimating how quickly BTC could surge, with the potential for recording a new all-time high before the end of Q2 2025. Coutts suggested that this could happen despite ongoing concerns about Trump’s tariffs and a possible economic recession.
Meanwhile, the People’s Bank of China (PBoC) has injected additional liquidity into the Chinese economy in recent weeks, which reinforced the global easing trend that could be supportive for risk assets such as crypto and stocks. At the same time, the Federal Reserve’s move to slow its quantitative tightening aligns with the broader market narrative that the central bank’s rate tightening cycle may be nearing its end.
David Duong, head of research at Coinbase, noted that with liquidity transitioning from tight to loose after nearly six months, the price of crypto assets may “bottom out” faster than market participants expect.
Also Read: Updated Crypto Regulations In Australia: Pledged To Take Action On Debanking
Spot Bitcoin ETFs See $500 Million In Net Inflows After Five Consecutive Weeks of Outflows
Spot Bitcoin exchange-traded funds (ETFs) have generated more than $500 million in net inflows over the past three days, regaining their lost ground amid Bitcoin’s mini-rally and wider gains in risk-on assets.
ARK21Shares Bitcoin ETF (ARKB), Fidelity Wise Origin Bitcoin Fund (FBTC), and BlackRock iShares Bitcoin Trust (IBIT) were responsible for the market turnaround, generating $180 million, $169.6 million, and $136.5 million in net inflows respectively over the three-day trading period.
The surge follows five consecutive weeks of net outflows in response to Trump’s tariff announcement, geo-political tensions, and other macroeconomic uncertainties collapsing the crypto market. The 11 Bitcoin ETFs, which began trading on Wall Street last year, have been widely successful and now collectively hold over $100 billion worth of BTC in assets under management (AUM).
Alan Orwick, co-founder of layer-1 blockchain Quai Network, wrote in an email to the crypto publication Decrypt that the shift from outflows to inflows this week signified growing confidence driven by Bitcoin’s price stabilization and institutional interest. He also noted that as the end of the quarter approaches, institutional investors are adjusting their portfolios to align with “strategic asset allocations”, with the rebalancing leading to increased investments in the ETFs as the flagship cryptocurrency has under or overperformed relative to other holdings.