Bitcoin and the wider crypto market jumped Wednesday after Federal Reserve Chair Jerome Powell said in a speech that December would likely bring smaller interest rate hikes.
The biggest cryptocurrency by market cap was trading for $17,102 at the time of writing—up 2% in the hour after Powell’s speech and over 4% in the past 24 hours, according to CoinGecko.
Ethereum, the second largest digital asset, jumped even more and was up over 6% in 24 hours, trading hands for $1,287.
Every other major digital asset was up following the comments by Powell. “The time for moderating the pace of rate increases may come as soon as the December meeting,” he said.
The central bank has this year upped interest rates 0.75 percentage points four times in order to get inflation—currently at a 40-year high in the U.S.—under control. It is expected the Fed will at its final meeting next month raise interest rates by 0.50 percentage points.
The crypto market has closely followed U.S. equities this year. This is because investors largely consider them risk assets.
And with the Federal Reserve’s aggressive monetary policy to get inflation in the U.S. under control, it has been a better bet to avoid risk and instead go to safe havens, like the dollar.
The U.S. dollar dipped on Wednesday following Powell’s speech; U.S. stocks rallied, with the S&P500 up 2%.
Trader Ryan Scott told Decrypt that it was “more clear than ever” that the Fed was going to cool down its tightening but that “they don’t want to make it so explicit that they loosen market conditions again, leading to a ramp up in stocks.”
Stay on top of crypto news, get daily updates in your inbox.