Bitcoin's price is mostly flat as Fed holds rates steady; Solana leads altcoin rally

Quick Take

  • Bitcoin’s price was mostly flat on Wednesday as the Federal Reserve held interest rates at the current range of 5.25%-5.50%, as expected.
  • Altcoins surged, with Solana’s SOL rallying 24% over the past 24 hours to over $45 per token.

Bitcoin BTC -1.06% 's price was mostly flat as the U.S. Federal Reserve held interest rates at their current level on Wednesday, as expected. Altcoins rallied, with Solana's SOL +3.68% surging 24%.

The Federal Open Market Committee did what the majority of analysts predicted and held the benchmark federal funds rate in the current range of 5.25%-5.50%. The move marked the third rate pause of the year, after the central bank held rates steady in September and June.

"Recent indicators suggest that economic activity expanded at a strong pace in the third quarter," the central bank said in a statement. "Job gains have moderated since earlier in the year but remain strong, and the unemployment rate has remained low. Inflation remains elevated."

"The U.S. banking system is sound and resilient," it continued. "Tighter financial and credit conditions for households and businesses are likely to weigh on economic activity, hiring, and inflation. The extent of these effects remains uncertain. The Committee remains highly attentive to inflation risks." 

"We will make decisions about the extent of additional policy firming and how long policy will remain restrictive, based on the totality of the incoming data, and the evolving outlook at the balance of risks," Jerome Powell said at the Federal Reserve's news briefing following the interest rate meeting.

The world's largest cryptocurrency by market capitalization rose 0.4% over the past 24 hours to $34,636 at 3:07 p.m. in New York, according to CoinGecko. Bitcoin has traded within a narrow range between around $34,000 and $35,000 for approximately a week now.

The global cryptocurrency market cap is $1.32 trillion, an increase of 0.3% over the last 24 hours.

An altcoin rally was spearheaded by Solana's SOL which rallied as much as 24%. Sol was changing hands at $45.19 at 2:00 p.m. ET, according to CoinGecko. "Solana has been an obvious choice in liquid markets over the course of the year. We’ve seen prices nearly 4x from our investment memo in December 2022 and Solana has been a core part of our long bias in that timeframe. At $42, we’ve seen the bulk of the short-term move," Split Capital posted on on Wednesday.

Split Capital added, "We remain bullish on Solana and the projects building but see an overextension in the interim. Recall also that as prices get higher for Solana, so too do FTX claims prices and thus the incentive to start unwinding spot over time."

Markets react to the Fed's announcement


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Keyrock Head of Business Development Justin d'Anethan told The Block that today's monetary policy developments will probably be welcomed by all investors.
"It would nudge traders into risk assets, whether they'd be in traditional or decentralized finance," d'Anethan said. He added that traders can now expect markets to get more liquid. "This will enable more sophisticated positions which in turn might create more dynamic trends, as opposed to the range-bound action we witness for a good chunk of the year."
D'Anethan underscored that the spot bitcoin ETF narrative is another factor driving speculators to become more willing to take bets. "The possibility of large allocators enabling fresh capital to come into the market could support bitcoin prices."
U.S. stocks were in the green just after the announcement from the Federal Reserve, with the Nasdaq up 0.7%, the S&P 500 rising 0.4% and the Dow Jones Industrial Average increasing by 0.2%.
(Updates with comment from Split Capital on Solana and Jerome Powell at the Federal Reserve press conference.)

© 2023 The Block. All Rights Reserved. This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.

About Author

Brian McGleenon is a UK-based markets reporter for The Block. He has worked as a financial journalist and producer for multiple news outlets over the years, such as Fuji Television, The Independent, Yahoo Finance, The Evening Standard, and The Daily Express. Brian is also a screenwriter and producer with one feature film produced and one in development with Northern Ireland Screen. Apart from web3 and cryptocurrency developments, he is also interested in geopolitics, environmental issues, artificial intelligence, and longevity research. Get in touch via email [email protected].


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