
Cryptocurrencies took a hit on Wednesday as geopolitical tensions in the Middle East overshadowed the Federal Reserve’s latest meeting.
Bitcoin fell to $64,500, down over 2% from its post-FOMC high of $66,500.
Other major cryptos like ether, Solana, and Cardano also dropped, though Ripple’s XRP retained some gains.
The CoinDesk 20 Index, reflecting the broad crypto market, slipped 0.8%.
This sell-off followed news from the New York Times reporting that Iran’s leaders had ordered retaliation against Israel for the killing of Hamas leader Ismail Haniyeh in Tehran, stoking fears of wider conflict in the region.
Earlier in the day, the Fed left benchmark interest rates unchanged, hinting but not committing to a potential rate cut in September.
Fed Chair Jerome Powell remarked, “No decisions have been made about a September cut, but the broad sense is that we’re moving closer to reducing rates.”
While cryptos struggled, traditional assets soared. The 10-year U.S. bond yields fell by 10 basis points, gold climbed 1.5% to $2,450, and WTI crude oil surged 5%.
Business equities also had a robust day, with the Nasdaq 100 rebounding 3% and the S&P 500 closing 2.2% higher, buoyed by Nvidia’s impressive 12% gain.
Grayscale’s head of research, Zach Pandl, noted, “Equities may have been slightly under-owned after the recent drawdown, while bitcoin is coming off a strong period with solid inflows. Gold’s rally follows a period of weakness.”
Pandl added, “Looking ahead, the combination of Fed rate cuts, bipartisan focus on crypto policy issues, and the potential for a second Trump administration may suggest a weaker U.S. dollar, which could be very positive for bitcoin.”
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