Bitcoin and a number of altcoins made a cautious recovery on Wednesday in anticipation of the Federal Reserve’s interest rate decision.
Bitcoin (BTC) climbed to $84,500 as it faced challenges breaking through the psychological level of $85,000.
Among the leading altcoins showing strong performance were Uniswap (UNI), Stellar (XLM), Algorand (ALGO), and Pepe (PEPE). Uniswap surged by 12% to reach $6.90, while Stellar increased by 10% to $0.293. Algorand and Pepe also saw gains of over 9%, contributing to a total cryptocurrency market capitalization of $2.79 trillion.
This ongoing recovery in the crypto market mirrored the upward movement in U.S. stock indices. Key benchmarks such as the Dow Jones, Nasdaq 100, and S&P 500 all rose by more than 0.50%, while the U.S. dollar index experienced a decline.
Altcoins gain ahead of FOMC announcement
The market bounce occurred as investors anticipated a dovish shift from the Federal Reserve following the conclusion of its meeting. Fed officials express concern that Donald Trump’s economic policies may risk pushing the U.S. into a recession by curbing consumer spending and impacting business investments. A closely monitored report from the Atlanta Fed forecasts an expected 1.8% contraction in the economy for the first quarter. A more accommodating position from the Fed could act as a positive catalyst for both equities and altcoins. An analyst highlighted in a note to Bloomberg that:
“The central bank is widely anticipated to pause its interest rate adjustments. At the same time, reassuring comments from Powell regarding economic stability could help ease some concerns.”
SEC vs Ripple case
Altcoins such as Uniswap, Stellar, Algorand, and Pepe experienced a boost following the SEC’s decision to conclude its long-standing legal dispute with Ripple Labs, a significant milestone after nearly five years of litigation.
The resolution of the case followed the SEC’s withdrawal of similar lawsuits against other companies, such as Uniswap, Coinbase, Kraken, Gemini, and OpenSea.
The SEC’s approach has shifted under the Trump administration towards being more accommodating to cryptocurrency—marking a significant change from the previous administration, which was heavily focused on enforcement actions led by Gary Gensler.
Additionally, indications suggest that the SEC may move forward with approvals for several recently submitted spot crypto ETF applications. Financial institutions have been seeking funds that track cryptocurrencies such as XRP, Polkadot, Litecoin, Aptos, and Sui. If approved, these ETFs could significantly boost demand from Wall Street investors.