Bitcoin rises 5% after Fed keeps policy steady

Federal Reserve Building

Bitcoin price rose sharply overnight close to $60,000 before slipping back a bit after the Fed stressed that it would be keep monetary policy loose while stimulus checks are being sent.

The world’s biggest cryptocurrency flirted near to its all-time high of above $62,000 touched on Saturday, and has risen around 1,000% in a year. Ethereum, the second largest digital currency, also rose to $1,850 on Thursday before slipping back a little to make up some 1% for the day.

According to analysts, the statement from Federal Reserve had helped the Bitcoin price.

The Fed said that it planned to keep supporting the economy until employment and inflation picked up, and foresaw no 7interest rate rises until 2024.

Federal Reserve policymakers boosted their projections for the US economic recovery on Wednesday, as new stimulus checks and vaccine rollouts are paving the way for a summer opening. The US GDP is forecasted to grow 6.5% this year, up from the prior estimate of 4.2%.

The Fed also sees unemployment rate sinking to 4.5% by the end of 2021.

Analysts are of the view that an accommodative Fed until the job is done should keep the world’s largest cryptocurrency strongly supported. Stimulus checks being sent to Americans are another key factor driving the Bitcoin boom.

With high prices, both liquidity and volumes are increasing and catching up to more traditional asset classes.

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