Markets: Bitcoin rebounds then retraces amid hawkish Fed comments, Solana gains
Bitcoins and U.S. cash sitting on a table.

Markets: Bitcoin rebounds then retraces amid hawkish Fed comments, Solana gains

Bitcoin held onto gains in Thursday morning trading in Asia, though had pulled back from an earlier spike above US$18,000 as the U.S. Federal Reserve raised interest rates in line with expectations, but added warnings about inflation threats. Solana also gained ground, with all other non-stablecoin top 10 cryptocurrencies retreating. BNB continued its slide.

See related article: Binance resumes USDC withdrawals amid record stablecoin outflows

Fast facts

  • Bitcoin rose 0.2% to US$17,820 in the 24 hours to 8 a.m. in Hong Kong, coming off an earlier high of US$18,318. It was the first time it had breached US$18,000 since the collapse of Bahamas-based crypto exchange in early November. Ether lost 1% to US$1,309, according to CoinMarketCap.
  • BNB fell 1.7% to US$267.94. The token has dropped 5.8% over the past seven days amid reports that its issuer, the world’s largest crypto exchange Binance Global Inc., is under investigation by the U.S. Justice Department. In addition, an independent review of Binance’s assets aimed at providing confidence following the FTX failure, instead raised questions about the review being less than comprehensive.
  • Binance chief Changpeng Zhao tweeted Tuesday night that customer net withdrawals reached US$1.14 billion in the prior 24 hours. He said it was “business as usual for us.”
  • XRP fell 2.4% to US$0.38 amid concerns that the U.S. Securities and Exchange Commission will be taking a tougher line on tokens it considers securities. The SEC charged former chief executive Sam Bankman-Fried with fraud this week and has been in a years long court dispute with Ripple Labs Inc., whose payment network is powered by XRP, over whether the token is a security.
  • Solana rose 2.4% to US$14.13, continuing its run up from Wednesday when it was the biggest gainer in the top ten, though it’s coming off steep declines after the FTX bankruptcy. Dogecoin dropped 2.6% to US$0.08 in the heaviest loss in the list.
  • The total crypto market capitalization was little changed at $867.47 billion, while the total trading volume of the past 24 hours fell 15.6% to $44.98 billion.
  • U.S. equities dipped on Wednesday. The Dow Jones Industrial Average lost 0.4%, the S&P 500 Index fell 0.6% and the Nasdaq Composite Index closed the day 0.8% lower.
  • The U.S. Federal Reserve raised interest rates by the expected 50-basis points on Wednesday, bringing rates to between 4.25% and 4.5% — the highest level in 15 years. The Fed has raised rates by 75 basis-points for the past four consecutive meetings in a campaign to lower inflation in the U.S. economy.
  • In comments after the rate rise, Fed Chair Jerome Powell said recent data shows inflation is beginning to cool, but warned of more rate hikes ahead as the evidence does not show inflation has peaked.
  • The consumer price index released on Tuesday showed that inflation was up 7.1% in November compared to last year, but less than the 7.3% forecast by Trading Economics. The CPI has shown a steady decline from 7.7% in October and 8.2% in September.
  • The Fed has increased interest rates since March to slow inflation, which it hopes to bring back within a target range of 2%, and has signaled interest rates may end up exceeding 5% in order to achieve this.

See related article: Crypto savings, staking products not protected in Hong Kong, finance regulator says

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