During Asian and European trading on Wednesday, Bitcoin rebounded from its recent lows. Rising shares of tech companies and chipmakers coincided with anticipation of the Federal Reserve’s interest rate decision. However, the rally subsequently slowed, and the cryptocurrency fell back to around $80,500.
As of 5:57 p.m. Moscow time, the largest cryptocurrency had risen 0.3% to $80,553.5, giving back some of its intraday gains to $81,826.
Other cryptocurrencies also saw declines.
In October, Bitcoin lost 3.2%, marking its second consecutive year of losses during this month, which runs counter to the historical “Uptober” uptrend.
A rally in the tech sector bolstered risk appetite ahead of the Fed’s decision.
The rise in cryptocurrencies on Wednesday was largely driven by a surge in tech stocks, which posted significant gains on the back of strong earnings reports from SK Hynix.
SK Hynix’s results helped bolster AI-related trading, triggering a wave of buying in technology stocks that had been underperforming. This, in turn, spurred buying in the crypto sector, which typically moves in tandem with tech stocks.
However, AI-related trading has also put pressure on cryptocurrency markets in recent months. Investors have been seeking clearer fundamentals and greater growth potential in the stocks of companies developing AI, rather than speculative bets on cryptocurrencies.
Cryptocurrency gains on Wednesday were limited by caution ahead of the Fed meeting.
Although the central bank is expected to leave rates unchanged at 4.0%, investors remain wary of a potentially “hawkish” outlook, especially amid persistent inflation in the U.S. and rising energy prices due to the conflict in the Middle East.
Higher interest rates have a negative impact on speculative, high-risk assets such as cryptocurrencies.
In addition to the Fed, the European Central Bank and the Bank of Japan are also expected to keep rates unchanged while issuing “hawkish” forecasts.
Robinhood shares fell due to the cryptocurrency slump, which impacted third-quarter earnings.
Shares of the Robinhood trading platform fell 3% in early U.S. trading on Wednesday. The prolonged downturn in cryptocurrency markets caused the company’s third-quarter earnings to fall short of Wall Street expectations.
Earnings per share fell 16% to $0.51, falling short of analysts’ forecast of $0.55. Total net revenue rose 12% to $1.42 billion.
At the same time, revenue from cryptocurrencies fell 55% to $120 million. Rising oil prices and geopolitical tensions destabilized the markets, and increased volatility forced retail traders to abandon speculative bets.
Cryptocurrency prices today: altcoins are trading in a sideways range, following Bitcoin.
After an initial rise, the broader cryptocurrency market also gave up its gains and traded mostly in a sideways range.
Ether, the second-largest cryptocurrency, fell 0.2% to $2,331.47, while XRP dropped 0.4% to $1.3123.
Solana traded unchanged, Cardano fell 1.2%, and BNB rose 0.6%.
Among meme coins, Dogecoin rose 1.6%, and $TRUMP gained 0.8%.