Yesterday was an exciting day for both Bitcoin and the traditional financial markets as the Federal Reserve concluded its two-day meeting conference. BTC made yet another unsuccessful attempt to reclaim $10,000, but according to some, it was its first major participation in a Fed event, signaling stronger institutional involvement in the field.
The US Federal Reserve ended a two-day June meeting yesterday, providing a new economic outlook and projections, reflecting the current financial state.
As somewhat expected, the Fed didn’t change its policy rates amid the ongoing public and health crisis that weighs in heavily on employment, inflation, and economic activity in the near term.
In light of this, the Committee decided to maintain its target range for the federal fund rates, keeping them at zero to 0.25% percent. It expects to maintain this particular target range until it’s sufficiently confident that the economy has managed to recover from the recent events and is on track to guarantee price stability and employment goals.
As CryptoPotato recently reported, Bitcoin’s price has been rather uncorrelated from legacy markets and gold as of late.
However, this time, Bitcoin was seemingly affected by the Fed meeting as its price was extremely volatile in the minutes after it. It surged to $10,000 before retracing back and settling at where it currently trades at around $9,800.
The move took very soon after the Fed addressed its market policy, and according to one of the most prominent commentators and cryptocurrency analysts, Mati Greenspan, “this is the first time ever that bitcoin has actively participated in a Fed event.”
He points out that it has been entirely motionless for several days, and the rush of volatility came along with the other markets as the meeting took place.
Greenspan believes that this “is a clear sign of increased institutionalization in the space.” There are plenty of arguments that support his statement.
According to a recent study conducted by the financial services giant Fidelity, one-third of institutional investors own Bitcoin and some other form of cryptocurrencies. Moreover, the field is being actively prepared to harbor interest from larger investors. Just yesterday, Bakkt partnered with Galaxy Digital to offer both trading and custody services for institutions.
Near-zero rates are likely to have a larger impact on bigger investors as opposed to small, retail ones. As such, Greenspan’s hypothesis seems increasingly plausible.