While inflation is not yet completely under control in the United States, the Fed does not rule out the possibility of strengthening its interest rates if necessary. This data is particularly followed by the crypto industry which paradoxically does not seem to be concerned about it in a context of general rise in crypto prices.
A particularly robust alternative crypto market
Bitcoin (BTC) and ether (ETH) are experiencing remarkable dynamism with the respective increase in their respective prices. Alternative cryptos to these two behemoths of the crypto sector are not left out. Overall, the majority of them have seen their valuation increase.
According to the figures, the total value of the entire crypto market increased by 3% in the last 24 hours. A dynamic that has brought the overall market capitalization of this industry to more than 1.4 trillion dollars.
Besides BTC and ETH, several prominent altcoins are participating in this trend. This is particularly the case for Chainlink (LINK). Over the past three weeks, the asset has seen a remarkable 100% price increase.
The situation is similar on the side of MATIC, Polygon’s native crypto whose valuation increased by 24.48% to currently reach $0.82. We don’t forget Solana (SOL) whose price tickles $50, after a daily increase of more than 7%.
Several crypto analysts doubt whether this trend will persist over time. What is certain, however, is that the crypto industry currently appears to disregard the policies of the US Federal Reserve (Fed) regarding interest rates. However, this data is particularly closely monitored.
A Fed rate increase still possible
Speaking recently on inflation, Jerome Powell, Chairman of the Fed, said he was optimistic about controlling it. The objective of the financial institution is to stabilize it at 2% maximum. Which is not yet the case.
“The Federal Open Market Committee is committed to implementing a monetary policy restrictive enough to reduce inflation to 2% over time; we are not convinced that we have achieved it,” said the official, during an event organized by the International Monetary Fund (IMF).
While doubt exists about the effectiveness of the Fed’s anti-inflation measures, Jerome Powell does not rule out the use of higher interest rates, if necessary. Could this be a warning for the crypto industry excited by the current rise in crypto prices?
It must be remembered. The increase in interest rates generally slows down the enthusiasm for riskier investments like cryptos. In other words, if the Fed followed through on its warning, the observed rise in crypto prices would be affected.
This is perhaps another sign that the bullish trend in cryptos should be tempered. In any case, according to JPMorgan analysts, the latter would only be an illusion, because it is fundamentally exaggerated.
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