SEC dovish speech, what is the impact of loose monetary policy on the cryptocurrency market?

The overall cryptocurrency market turned from a decline to a gain this morning, reversing yesterday's decline. Investors temporarily halted the recent sell-off and began to consider the Federal Reserve's latest monetary policy decision. At the time of writing, the price of Bitcoin is up nearly 10% during the day and is currently quoted at $67,138 in Gate.io. Bitcoin briefly fell below $61,000 yesterday evening.

At the end of the Fed's two-day policy meeting, as expected, the Fed delivered a dovish speech at the meeting. Powell said he believes interest rates may be at a cyclical peak, suggesting that three rate cuts this year are still possible. At the same time, he reiterated that the Fed will slow down the pace of balance sheet reduction, and said that this will happen soon and does not want a repeat of the shortage of reserves. Powell said that most officials still believe that confidence in inflation is possible, but he also acknowledged that the January-February U.S. economic data did not boost the Fed's confidence in the progress of U.S. inflation. The labor market remains relatively tight, but supply and demand conditions continue to move towards a better balance.

Chart source: Federal Reserve

In terms of balance sheets, Powell said that Fed securities have fallen by nearly $1.5 trillion since the start of balance sheet reduction. "At this meeting, we discussed issues related to slowing down the rate of decline in securities holdings. While we didn't make any decision on this today, the Committee generally agreed that the QT reduction was imminent, in line with our previously published plans. ”

After the passage of the Bitcoin spot ETF, BTC gradually entered the mainstream financial market. Like tech stocks, Bitcoin will also benefit from low interest rates and improved market liquidity, which will improve investor sentiment and increase investment in growth assets.

Bitcoin is down 10% over the past week after reaching an all-time high of $73,769 last Thursday, but BTC is still up 53% year-to-date, according to Gate.io data.

Ethereum rose 12% to $3,520 during the day, having briefly topped $4,000 last week. Solana rose 13% to $190, leading the general rally of the Solana eco-token. The meme sector DOGE and FLOKI rose by 20% and 40%, respectively, and meme coins generally performed well.

Chart: FLOKI Today's Chart

Cryptocurrency-related stocks performed better throughout the day. Coinbase shares rose 11%, and MicroStrategy rose another 9% after plunging about 20% earlier this week. In the crypto miners sector, Iris Energy and CleanSpark rose 26% and 22%, respectively. Marathon Digital is up 16% and Riot Platforms is up 11%.

After the Fed meeting, the Dow Jones Industrial Average, S&P 500 and Nasdaq Composite all closed at record highs.

**Author: Icing. This article represents the views of the author only and does not constitute any trading advice. The content of this article is original, the copyright is owned by Gate.io, if you need to reprint, please indicate the author and source, otherwise you will be held legally responsible. **