Bitcoin Surges Past $105,000 Following Fed Meeting

On January 29, the United States Federal Reserve maintained its key interest rate range at 4.25-4.5% per annum. In the previous three meetings, the central bank had eased monetary policy.

The decision aligned with market expectations and the consensus forecast of analysts.

Following the Fed’s verdict, the price of digital gold tested the $104,000 level. On the morning of January 30, quotes exceeded $105,000, reaching $105,450 at the time of writing.

The reason was a comment by Fed Chair Jerome Powell regarding the possibility of U.S. banks working with cryptocurrencies given proper risk management.

In the accompanying commentary, the Fed omitted mention of inflation nearing the target 2%. The central bank described it as “somewhat elevated,” while labor conditions were termed “stable” amid low unemployment stabilization.

The moderately hawkish nature of the document was softened by Fed Chair Powell during a press conference. He emphasized that the Fed would not wait for inflation to ease to 2% before resuming monetary easing but was not ready to rush into rate cuts until new macroeconomic data emerged.

Powell clarified that further actions require an understanding of President Donald Trump’s trade policy direction. He refrained from discussing the impact of tariffs on consumers but noted a reduction in the overall price level effect from Chinese imports.

Separately, the Fed Chair promised to continue the QT program, which involves selling government and mortgage bonds from the central bank’s balance sheet and reducing system liquidity.

Powell described current asset valuations as “overvalued” and saw the decline in the AI sector as a tightening of financial conditions.

The next Fed meeting is scheduled for March 18-19, 2025. According to the CME FedWatch Tool, traders reduced the likelihood of policy easing from 31.5% to 17%. Expectations for such a move shifted from May to June.

The S&P 500 index ended the day down 0.47%. In Thursday’s pre-market, the futures on the indicator rose by 0.36%. Quotes are regaining ground following reports from Meta and IBM, which offset disappointing data from Tesla and Microsoft.

In December 2024, CoinDesk noted a rise in the U.S. money supply aggregate M2 to nearly a record $21.5 trillion, which is an “optimistic signal for risky assets.”

Previously, bitcoin futures entered bearish territory for the first time since August 2023 due to news surrounding DeepSeek and uncertainty over the Fed meeting.