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Crypto and equity markets both firmed in the hours after the Federal Reserve's Wednesday rate decision and across Thursday, with traders reading the central bank's quarter-point hike and accompanying guidance as roughly in line with expectations rather than a fresh source of tightening risk. Bitcoin traded at $76,642, up modestly over 24 hours, according to CoinGecko, while total crypto market capitalization rose 1.6% to $2.63 trillion.
The rally was broad rather than concentrated in Bitcoin. Of the 100 constituents in the CoinDesk 100 index, 94 advanced over 24 hours, and the small-cap-heavy CoinDesk 80 index gained 4.7% against just 1.2% for the Bitcoin-heavy CoinDesk 5.
Zcash was the standout, around 30% to a record past $1,485 after Paradigm co-founder Matt Huang disclosed the investment firm holds ZEC, calling it "a private complement to Bitcoin," a disclosure that coincided with a governance vote to shorten the network's block times while preserving its Bitcoin-style halving schedule.
US equity futures also rose on the decision, with Nasdaq 100 futures gaining 1.04% and S&P 500 futures adding 0.81%, alongside a 0.17% dip in the dollar index and gains in gold and silver, as markets read the Fed's updated projections, a median of one additional quarter-point hike this year, as consistent with a measured pace rather than an accelerating one.
Underneath the relief rally, positioning told a more cautious story. US spot Bitcoin ETFs shed another $296 million on Wednesday, extending a seven-session outflow streak that has topped $1 billion since September 8, according to CoinDesk. Thursday ETF flow data was not available as of publication time. Bitcoin remains 6.9% below its September 4 monthly high of $82,284, and crypto-linked equities sold off the following day even as tokens held their gains: Coinbase fell 4.4% to $164.51 and Robinhood dropped 5.5% to $104.42 on Thursday, a divergence suggesting the equity market is pricing in something the token rally is not.
Some analysts are drawing a more pointed historical comparison. Bitcoin currently sits roughly 40% below its record high of $126,000 set last October, matching the discount from November 2021's peak at the point the Fed began tightening in March 2022, a cycle that produced an 18% rally over 12 days before a 50% slide that stretched into the FTX collapse. Futures markets are pricing in a further 75 basis points of Fed tightening over the next six months, with Goldman Sachs forecasting another hike as soon as October, meaning this week's rally may face its own test well before year-end.
