Bitcoin (BTC) and other cryptocurrencies are rallying after the U.S. Federal Reserve announced that it is raising interest rates by 25 basis points in an effort to lower inflation.
Crypto prices had slumped heading into the Sept. 16 decision by the U.S. central bank, and higher interest rates are typically a negative for risk assets such as stocks and crypto.
However, analysts say digital assets are rising alongside stocks amid a relief rally after the Fed and its Chair Kevin Warsh asserted their independence and acted decisively on inflation.
U.S. President Donald Trump has called publicly for the central bank to slash its trendsetting Federal Funds Rate to 1% to help stimulate the American economy.
Instead, the Fed elected to raise interest rates 25 basis points and take the Fed Funds Rate to a range of 3.75% to 4%.
The central bank also signaled that another 25-basis point rate hike is likely this year with inflation in the U.S. running above 3%.
Also giving a boost to crypto prices on Sept. 17 are declines in crude oil prices and government bond yields.
Brent crude oil, the international standard, is down 4% and trading at $101.60 U.S. a barrel after rising close to $110 U.S. earlier in the week.
The yield on the benchmark 10-year Treasury is down to 4.951% following the Fed rate increase.
Bitcoin, the largest cryptocurrency by market capitalization, is trading near $77,000 U.S. early on Sept. 17 after falling close to $75,000 U.S. heading into the U.S. interest rate decision.
Other cryptocurrencies, such as Ethereum (ETH) and Solana (SOL), are up 3% on the day.
