- Federal Reserve holds off on rate cuts, keeping interest rates between 4.25% and 4.5%.
- Bitcoin defies expectations, surging past $105,000 despite market volatility.
- Fed Chair Jerome Powell clarifies that banks can serve crypto clients, fueling optimism.
Bitcoin Rallies Despite Fed’s Decision
Bitcoin just blew past $105,000, showing remarkable strength despite a hawkish stance from the Federal Reserve. On Wednesday, Fed Chair Jerome Powell announced that the central bank will not cut interest rates yet, citing inflation concerns.
🔥BULLISH: Trump’s Treasury Secretary Scott Bessent said, “I think that everything is on the table with #Bitcoin.” pic.twitter.com/uuCPkMrIvS
— Cointelegraph (@Cointelegraph) January 30, 2025
Traditionally, crypto tends to react negatively to such news. But this time? Bitcoin ignored it completely.
While the stock market dipped, with the S&P 500 and Nasdaq dropping 0.5%, Bitcoin went in the opposite direction, jumping from $104K to $105K within hours.
Why Bitcoin is Defying Market Trends
For years, Bitcoin has been closely tied to U.S. interest rates, often behaving like a tech stock rather than a true hedge against inflation. But according to Santiment, a leading analytics firm, that’s starting to change.
📈 Cryptocurrency has not (yet) been phased by Jerome Powell and the Fed's decision to halt interest rate cuts for the time being. Interest rates have been a sensitive topic for investors and traders of all sectors, particularly after they were aggressively cut in 2020 (as a… pic.twitter.com/p49FjhLiKI
— Santiment (@santimentfeed) January 29, 2025
“Bitcoin’s best-performing years were when it had minimal dependence on the stock market,” Santiment noted, suggesting that crypto is maturing into an independent asset class.
This shift could mean that Bitcoin is breaking free from its past market patterns and proving its value as digital gold.
Powell’s Crypto Comments Give BTC a Boost
Another factor driving Bitcoin’s rally? Powell’s surprising stance on banks and crypto.
During his press conference, the Fed Chair confirmed that U.S. banks can work with crypto firms, as long as they properly assess the risks.
“Banks are perfectly able to serve crypto customers as long as they can understand and manage the risks,” Powell stated.
Trump has demanded the Fed continue cutting interest rates…
— Polymarket (@Polymarket) January 29, 2025
But there’s a 98% chance The Fed ignores his demands today. pic.twitter.com/TwXbobMw1P
This statement contradicts past claims that the U.S. government is actively “de-banking” crypto companies. Powell clarified that there’s no official ban on crypto banking, which could encourage more institutions to embrace digital assets.
Interestingly, Powell also reaffirmed that Bitcoin won’t be held as a reserve asset by the Fed, but acknowledged its growing role as digital gold.
What’s Next for Bitcoin?
Bitcoin is currently sitting at $105,167, up 2% in the last 24 hours, pushing the global crypto market cap to $3.57 trillion.
With the Fed holding rates steady and institutional support growing, some analysts believe Bitcoin could be gearing up for another major breakout.
If BTC continues this momentum, we could see it test new highs in the coming months.
But for now? The market is watching closely.
