Bitcoin Price Rises. What’s Driving Cryptos After Fed Rate Decision.

Bitcoin is the world’s largest cryptocurrency with a market value of $2.3 trillion. (Dreamstime)

Bitcoin and other cryptocurrencies rose early Thursday, recouping losses after the Federal Reserve’s latest decision to hold interest rates steady.

Bitcoin is up 0.4% over the past 24 hours to $118,522, according to CoinDesk data.

The price of the world’s largest crypto fell sharply to about $116,000 immediately after the central bank announced its decision to hold rates steady on Wednesday afternoon. However, it has climbed back up again since, in line with a boost to stock markets following strong earnings reports from major technology companies.

Ether rose 2.3% and XRP 2.6%. Solana traded up 2.2%.

The price of Bitcoin has hovered just under the $120,000 mark since mid-July after it hit a record high of over $122,000.

“The influence of macroeconomic factors on cryptocurrencies continues to grow, even in the absence of major industry developments—a trend that can also be seen as part of the market’s maturation,” FxPro analyst Alex Kuptsikevich wrote in a research note Thursday.

On Wednesday, the Trump administration’s working group on digital asset markets released recommendations on the U.S. approach to cryptocurrencies. To many crypto enthusiasts’ disappointment, it didn’t elaborate on a proposal for the government to create a strategic reserve of Bitcoin.

“[The report] did not contain any details that could inspire new buyers, making the crypto market follow the trends of macroeconomics and traditional finance,” Kuptsikevich said.

Write to Elsa Ohlen at elsa.ohlen@barrons.com