Crypto Market Reacts to FOMC Speech: Bitcoin and Ethereum See Growth
Bitcoin and Altcoins’ Reaction to FOMC Chairman’s Speech
The recent remarks of the Federal Open Market Committee (FOMC) chairman have drawn investors’ attention to Bitcoin and other significant altcoins.
Impact of FOMC Speech on Bitcoin and Altcoins
Following a speech by FOMC Chairman Jerome Powell, Bitcoin’s social dominance increased. A decrease in the interest rate could drive up the price of all cryptocurrencies. In a statement released by the FOMC on December 1, the committee chairman reported that the core inflation rate remained at about 2.5%. This inflation rate followed an increase to about 3.5%, caused by the disruptions caused by the COVID-19 pandemic. Notably, the chairman attributed this increase to increased demand while supply was declining.
Bitcoin and Altcoins: Social Dominance and Financing Rates
Recent data suggest that Bitcoin reacted more favorably to these developments compared to altcoins. Our analysis showed a notable increase in Bitcoin’s social dominance on December 1. At the time of the press release, the value was over 24%, suggesting that the king coin dominated over 24% of the discussions in the cryptocurrency space.
Ethereum [ETH], representing the altcoins, also saw an increase in social dominance. However, it did not reach the level observed for Bitcoin, as it was below 10% at the time of the press release.
The examination of the financing rates of Bitcoin and Ethereum showed different trends at the time of the press release. Bitcoin’s financing rate was about 0.0084%, while Ethereum’s was about 0.010%. This suggests that ETH attracts more financing than BTC.
Outlook for Bitcoin and Ethereum
At the time of publishing this article, Bitcoin was trading at about $38,800, representing an increase of less than 1%. Ethereum was also trading at about $2,100, representing an increase of nearly 1%.
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The FOMC will meet later in December to announce the new interest rate.
Sources: AMBCrypto, Santiment, Coinglass
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