Bitcoin (BTC) surged to its highest level in two weeks on March 20, fueled by speculation that the US government was set to announce a significant update to its cryptocurrency policy. As per the latest data, BTC/USD approached a value of nearly $87,500 on Bitstamp. Currently stabilizing around $86,000, Bitcoin gained from a relatively calm Federal Reserve meeting the day before, where officials decided to maintain interest rates at their existing levels.
Policymakers indicated their expectation for two rate cuts by the end of 2025, with the Fed Chair commenting that inflation has “eased significantly.” He stated, “There’s no rush to alter our policy stance, and we’re well-equipped to wait for greater clarity,” during his opening remarks before a press conference that followed the decision on rates. This “wait-and-see” approach helped alleviate pressures on risky assets, with Bitcoin mirroring the upward movement observed in US stocks, ultimately concluding the day on a positive note. The S&P 500 saw an increase of about 1% during the session on March 20, adding $500 billion to its market capitalization.
Commenting on the situation, Arthur Hayes, former CEO of a notable crypto exchange, interpreted the Fed’s maneuvers as a clear signal for investors to take on more risk. “The Fed basically ended quantitative tightening on April 1. The next catalysts for further bullish sentiment could be either an SLR exemption or a restart of quantitative easing,” he noted in a characteristic social media post. “Was $BTC at $77k the bottom? Possibly. But the stock market might still face more challenges before fully aligning with the optimistic sentiment, so remain alert and liquid.”
Focus remains on an anticipated update from the US regarding cryptocurrency, as traders speculated about a potential announcement on March 21. “This would be his first significant announcement since March 6, when the national crypto reserve was created,” a trading resource pointed out in a social media post. “Rumors suggest that significant adjustments to strategies may be forthcoming.”
After the recent executive order establishing a Strategic Bitcoin Reserve earlier this month, the markets remained relatively calm, as it became clear that this plan did not necessarily mean the US would be purchasing BTC. However, with the latest closing prices surpassing critical resistance lines, optimism was rekindled. “Bitcoin only needs to increase another 8% to reclaim the upper range and eliminate this downside deviation,” reported a well-known trader and analyst. “Is that too much to ask, considering BTC has risen almost 13% since hitting last week’s lows?”
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