The Cardano (ADA-USD) crypto is in focus today after most investors were pleased by statements made yesterday by Federal Reserve Chair Jerome Powell. The crypto rallied sharply last night and earlier this morning before losing momentum. It’s now down about 4% for the day.
Ahead of the Fed’s Federal Open Market Committee meeting, held on May 3 and May 4, many on Wall Street had been concerned that the central bank would seek to raise interest rates so quickly that most investors would no longer be interested in buying risk assets that could take a long time to appreciate. According to some experts, cryptocurrencies in general — and Cardano in particular — are in the latter category.
Fed Rate Hike Puts Cardano Crypto in the Spotlight
In accordance with expectations, the central bank decided to raise its benchmark interest rate by 0.5 percentage points, or 50 basis points. Importantly, Powell also seemed to rule out raising the rate by 75 basis points at any single, future meeting. He stated:
“So [a] 75-basis-point increase is not something the committee is actively considering.”
Moreover, Powell indicated that the central bank could consider raising its benchmark rate by 25 basis points at future meetings if it sees concrete signs that inflation is slowing. If not, Powell did suggest that the Fed would look to implement 50-basis-point increases “at the next couple of meetings.”
In the wake of Powell’s comments, the combined market capitalizations of all cryptocurrencies were surging more than 5% earlier this morning. The total trading volume of cryptocurrencies was soaring roughly 40%.
The Cardano crypto has dropped 32% in the last month, 42% so far this year, and 46% over the last 12 months.
On the date of publication, Larry Ramer did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.