Bitcoin rebounded on Wednesday, recovering from earlier losses, as investors paused amid the recent market downturn and assessed the Federal Reserve's latest policy decision.
According to Coin Metrics, the price of Bitcoin rose by 1.7% to $65,773.23, bouncing back from a low of $60,793.60 earlier in the day.
Following the conclusion of the Federal Reserve's two-day policy meeting, cryptocurrencies saw a resurgence. The central bank kept rates unchanged, as anticipated, and reiterated its intention for multiple rate cuts this year. Similar to tech stocks, Bitcoin often thrives in environments of low interest rates and improved market liquidity, fostering positive sentiment and increased investment in growth assets.
Oppenheimer executive director Owen Lau noted, "There has been an inverse relationship between rates and bitcoin price." He explained that when the Fed raises interest rates, it drains liquidity from the market, negatively impacting Bitcoin and tech stocks. Conversely, rate cuts inject liquidity into the market, benefiting riskier assets like Bitcoin, which sometimes behaves like a high beta tech stock.
Despite a recent 10% decline from its all-time high of $73,797.68 last Thursday, Bitcoin remains up 53% for the year.
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