The price of bitcoin (BTC), ethereum (ETH), and most other cryptoassets moved higher today, after the US Federal Reserve (Fed) yesterday raised rates for the first time since 2018, and a discussion about bitcoin’s role in a future monetary regime re-emerged.
As of Thursday at 16:00 UTC, BTC stood at USD 40,915. The price was up by 0.6% for the past 24 hours, after seeing strong gains yesterday that pushed the coin above USD 41,000 for the first time in a week.
At the same time, ETH traded at USD 2,809, up almost 4% for the past 24 hours on what has been a green day for nearly all cryptoassets from the top 100 by market capitalization.
The gains in the market today come after the first interest rate hike in four years in the US yesterday, when the Fed raised rates by 25 basis points for the first time since the onset of the COVID-19 pandemic. The event marked the beginning of a new cycle of monetary tightening from the central bank, as it reiterated its objective of bringing inflation down.
Meanwhile, bitcoin, in particular, has also received renewed relevance as discussions have intensified about the coin’s role in a future global monetary regime that is no longer dominated by the US dollar.
The issue went mainstream and has been covered by multiple media outlets after Western governments cut off Russia’s access to its foreign currency reserves, potentially leading some countries to rethink how their reserves really are.
The discussions were once again brought up today after former BitMEX CEO Arthur Hayes argued in an essay that the move to freeze Russian reserve assets marks the end of the current monetary regime, and that bitcoin and gold will ultimately benefit.
The same topic was also commented on today by Mikkel Mørch, Executive Director at the digital asset investment fund ARK36, who pointed to the move as something that “may result in the diminished status of the dollar as the global reserve currency.”
“If we are seeing the beginnings of a new monetary world order with a weaker dollar, bitcoin will likely be one of the long-term beneficiaries of this shift,” Mørch said.
“Taking that into account, there is little wonder why banking industry insiders are predicting that BTC will be worth between USD 100-200K within the next few years,” he added.
On a similar note, Ruud Feltkamp, CEO of crypto trading bot Cryptohopper, also brought up the ability of bitcoin to serve as a safe haven asset.
“The fact that bitcoin has mainly risen since the outbreak of the war shows that such macro events have a limited effect, and Bitcoin is once again proving itself as a safe-haven asset. If you live somewhere with high inflation, it’s clear again and again that crypto is a serious alternative,” Feltkamp said in comments shared with Cryptonews.com.
However, not everyone was convinced that the move higher over the past 24 hours should be seen as the beginning of a more sustained trend.
“Improving sentiment for risk assets has given bitcoin a boost as the cryptocurrency market moves higher in line with global stocks,” the Bitfinex Trading Team said in a commentary.
It added that it “remains to be seen” whether the gains that have been seen in the past couple of days are pointing to “a receding crypto winter.”
With Fed Chairman Jerome Powell also appearing to hold the door open for larger rate hikes of 50 basis points later this year, some claim that a bitcoin rally, if it was to happen, would be short-lived.