Bitcoin (BTC-USD) soared past $105,000 (£84,359) following the Federal Reserve’s decision to keep interest rates steady, with Fed chair Jerome Powell indicating that banks can serve crypto clients — provided they manage the risks effectively.
Bitcoin rallied 3% to now trade at just over $105,000 on Thursday, after dipping to $101,800 on Wednesday, marking its highest level in three days.
“Banks are perfectly able to serve crypto customers as long as they can understand and service the risks,” Powell said during Wednesday’s post-Federal Open Market Committee (FOMC) press conference.
The Fed chair emphasised that banks operating under the Fed’s oversight must ensure their clients’ activities remain “safe and sound.”
Read more: Crypto live prices
Bitcoin is currently around 4% off its record high of $109,241, reached before president Donald Trump’s inauguration on 20 January.
Ethereum (ETH-USD) rose 2.5% to $3,210 on Thursday and Solana (SOL-USD) climbed 3.7% to $240, according to CoinGecko data.
During the FOMC meeting, the Fed left its benchmark interest rate unchanged, maintaining a target range of 4.25% to 4.50%. This decision was widely anticipated by interest rate traders. According to the CME’s FedWatch tool, interest rate traders are also giving an 82% probability of rates remaining paused at the US central bank’s next policy meeting on 19 March.
The rate pause follows a series of reductions last year that cut the federal funds rate by a total of 100 basis points. Powell attributed the decision to hold rates steady to ongoing economic strength and persistent inflationary pressures.
Read more: Fed holds rates steady, drops language about inflation progress
Powell noted while inflation has eased significantly from its 2022 peak of 9.1%, it remains at 2.9% annually, making further rate adjustments uncertain.
Markets react to rates hold
US stocks closed lower on Wednesday, though they recovered from the day’s worst levels, as the Federal Reserve kept interest rates unchanged.
Technology stocks weighed most heavily on the S&P 500 (^GSPC), with Nvidia (NVDA) dropping 4.1% and Microsoft (MSFT) slipping 1.1%. The declines came two days after a tech selloff triggered by Chinese startup DeepSeek’s launch of AI models which it claimed were more cost-effective and operated on less advanced chips than those used by US-based OpenAI.
Following the Fed’s announcement, stocks initially deepened their losses, with the Nasdaq (^IXIC) at one point sliding more than 1% in afternoon trading.
