Bitcoin Soars After Fed Keeps Rates Steady; New Hampshire Passes Bitcoin Reserve Law

Bitcoin’s price surged 2% following the Fed’s decision to keep interest rates steady, with wider market indices also rising. Simultaneously, New Hampshire passed a law allowing state treasury investments in Bitcoin, marking a significant step in state-level financial regulation and innovation.

Bitcoin Edges Higher After Fed Leaves Rates Untouched

On Wednesday, the U.S. Federal Reserve announced it would keep interest rates steady, between 4.25% and 4.5%, primarily due to ongoing concerns about inflation. Unanimous votes from the committee highlighted that while some were eager for cuts, the Fed is wary of any rash decisions. In reaction to the Fed’s stance, Bitcoin (BTC) saw a notable increase of 2%, signalling a positive response from investors.

As Bitcoin climbed, the broader crypto market followed suit—gaining about 0.95% and touching a market cap of approximately $2.98 trillion, according to Coinmarketcap. Traditional stock indices also got a boost, with the S&P 500, Nasdaq, and Dow Jones Industrial Average respectively rising by 0.43%, 0.27%, and 0.70%. Investors are evidently reacting to the Fed’s decision and the uncertainty surrounding economic recovery.

Economists had anticipated the Fed’s decision largely driven by the vocal criticism from former President Donald Trump regarding Fed Chair Jerome Powell’s policies. Trump hasn’t publicly responded since the announcement, but Powell seems to have endured the pressure. Pauline Shangett, CMO of Changenow, commentating on the situation, remarked, “With the Fed hitting pause, it shows there’s no quick fix for the economy. This ongoing uncertainty often nudges investors toward assets less influenced by politics.”

Bitcoin’s current price, as of this reporting, reached $96,664.77—a slight move up from prior fluctuations between $94,494.88 and $97,625.81. The cryptocurrency has seen a 7-day gain of 2.04%, reinforcing its steady momentum. However, trading volume surged dramatically, increased by 208.93%, amounting to $71.54 billion during the last day, suggesting strong investor engagement.

BTC’s market cap also improved, rising by 2.07% to nearly $1.91 trillion. Moreover, Bitcoin’s dominance within the crypto market climbed to 65.45%, which indicates a noteworthy preference among traders for Bitcoin over various altcoins. In the derivatives market, the open interest for BTC futures rose by 1.93% to $64.37 billion, highlighting increased involvement from those trading with leverage. According to Coinglass, total liquidations in the past 24 hours stood at $273,240, largely driven by short traders hoping to capitalize on potential declines.

New Hampshire Leads As First State To Pass Bitcoin Reserve Law

In a groundbreaking move, New Hampshire has become the first state in the U.S. to allow its treasury to invest directly in Bitcoin and other top-tier digital assets through the new House Bill 302. Signed into law by Governor Kelly Ayotte, the bill officially authorises the state to create a strategic bitcoin reserve, positioning New Hampshire at the forefront of state-level financial innovation.

The newly enacted law aims to protect taxpayer interests while also diversifying state resources. It incorporates guidelines to secure asset custody and caps total exposure to digital assets at 5% of the state’s funds. Announcing the bill’s signing on X, Governor Ayotte expressed pride in New Hampshire’s pioneering role, stating, “New Hampshire is once again first in the nation!”

According to Dennis Porter, CEO of the Satoshi Action Fund—a nonprofit that helped frame the bill—New Hampshire’s trend-setting legislation could serve as a model for other states. He mentioned that it now proves effective means to tackle taxpayer protection and reserve diversification through embracing Bitcoin. The law extends to digital currencies with market caps above $500 billion, currently limited to Bitcoin.

While some legislators and financial analysts warn about Bitcoin’s notorious volatility, proponents argue that its decentralised nature offers a protection against inflation and advocates for fiscal sovereignty at the state level. Although other states have proposed similar laws, notably Arizona recently took a step back when Governor Katie Hobbs vetoed a bill citing concerns on cryptocurrency’s volatility.