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Altcoins from the DeFi and smart contracts sector outperformed bitcoin on Thursday. (Digital Art/The Image Bank/Getty Images)
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A day after Federal Reserve Chair Jerome Powell offered unexpectedly less hawkish remarks to accompany the U.S. central bank’s modest interest rate increase, most major cryptocurrencies were in the green, with several tokens from the decentralized finance (DeFi) and smart contract platform sectors assuming the deepest hues.
Among Thursday’s biggest winners, decentralized exchange Uniswap’s native governance token, UNI, rose nearly 4.5% over the past 24 hours to trade over $7.20. Layer 1 blockchain Avalanche’s AVAX token surged almost 3.4% to recently trade above $22. Altcoins’ gains have been part of an overall market upswing that followed the Fed’s announcement underscoring its commitment to less aggressive monetary tightening.
Ether (ETH), the second-largest cryptocurrency in market value, was recently trading over $1,650, up a fraction of a percentage point since Wednesday, same time.
Bitcoin (BTC) was recently trading above $23,560, roughly flat over the past 24 hours, albeit slightly in the red. BTC had been changing hands in a narrow range between $23,700 and $24,200 since the Fed announcement before dipping late Thursday.
The CoinDesk Market Index, which measures crypto market performance, was recently flat after spending much of the day in the green.
Crypto markets’ performance correlated with traditional markets’ post-rate announcement rally. The tech-heavy Nasdaq Nasdaq Composite and S&P 500 closed up 3.2% and 1.4%, respectively, a day after Powell said “[the] disinflationary process” had “started.”
Crypto-exposed stocks also soared: Exchange Coinbase (COIN) surged 24%, while MicroStrategy (MSTR), the software company with a large bitcoin portfolio, rose 9%. Bitcoin miner Marathon Digital Holdings (MARA) was up 6.3%.
Digital assets’ positivity suggested that “the bottom of this [down] cycle is probably in for crypto, and that we are entering something of a recovery phase for this market,” Joe Ziolkowski, CEO and co-founder of crypto-focused insurer Relm Insurance, told CoinDesk.
“Both retail and institutional-grade investors are allocating more and more capital to crypto assets,” Ziolkowski said. “This trend will likely continue if it becomes clearer that the blowups that took down FTX, [Terra] and Three Arrows [Capital] are over with.”
Ben McMillan, chief investment officer of crypto asset manager IDX Digital Assets, said bitcoin and the broader crypto market were “early in this bid for risk-on assets.”
“I wouldn’t be surprised if we see a pause here for crypto while equity markets ‘catch up,'” McMillan added in an email.
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