Crypto and equities surged following Fed's decision to keep rates unchanged. | Credit: Michael M. Santiago/Getty Images
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Key Takeaways
Bitcoin surged past $86,000, Ethereum reclaimed $2,000, and XRP jumped 8% after the Fed decision.
Stocks posted their best post-Fed rally in a year, led by tech giants and crypto-related equities.
Analysts warn inflation could delay rate cuts, tempering market optimism.
The Federal Reserve’s decision to keep interest rates steady sent stocks and cryptocurrencies soaring, with Bitcoin (BTC) climbing past $86,000 and equities posting their strongest post-Fed rally in a year.
But not everyone is convinced the optimism will last. Some analysts warn that stubborn inflation could keep rates higher for longer, challenging expectations for cuts and setting the stage for renewed market volatility.
Bitcoin surged 4% on March 20, climbing to $86,119 after the Federal Reserve kept interest rates unchanged. The decision, widely expected by markets, boosted sentiment across the board, with risk assets rallying.
Trading volume surged to $36.8 billion, pushing Bitcoin’s market capitalization to $1.7 trillion.
Technical indicators, including the Moving Average Convergence Divergence (MACD) and Relative Strength Index (RSI), suggest bullish momentum, reinforcing expectations of further gains.
XRP surged after the SEC dropped its case against Ripple. | Credit: CoinMarketCap
Ethereum (ETH) followed suit, rising 3.9% to reclaim the $2,000 level, while XRP jumped 8% to $2.45 after the SEC dropped its case against Ripple.
The broader crypto market also gained, with total capitalization climbing to $2.81 trillion—up 3% in the past day.
Liquidity inflows were evident in trading activity, with 24-hour volume surging 49% to $103.75 billion. Decentralized finance (DeFi) accounted for $7.1 billion, while stablecoins dominated transactions, contributing $97.54 billion, or 94% of total volume.
Stocks Log Strongest Post-Fed Rally in a Year
Wall Street also surged, with major indexes posting their best post-Fed performance in a year. The S&P 500 rose 1.1%, the Nasdaq 100 climbed 1.4%, and the Dow Jones Industrial Average gained 0.9%, buoyed by a rally in megacap stocks.
Megacap stocks led the rally, with Nvidia and Tesla posting strong gains. Boeing also jumped after projecting smaller-than-expected cash outflows for the quarter, further boosting market sentiment.
Meanwhile, U.S. Treasury yields edged lower, with the 10-year note slipping four basis points to 4.24%, and the dollar pared its earlier gains, ending up 0.2%.
Strategy (MSTR) recorded one of its best performances. | Credit: MarketWatch
Crypto-related equities saw a strong upswing. Strategy (MSTR) jumped over 7%, Riot Platforms (RIOT) climbed 5%, MARA added 3.8%, and Hut 8 surged 7.1%, tracking gains in the broader digital asset market.
Despite concerns over slower growth and rising inflation in 2025—factors that might typically weigh on equities—investors appeared to take the Fed’s message in stride.
Analysts at BlackRock noted that markets had already priced in a more challenging economic outlook, minimizing the shock of the central bank’s latest projections.
Market Optimism Holds, but Risks Loom
Linh Tran, a market analyst at XS.com, said expectations of flexibility from the central bank have driven capital inflows.
“Investors now believe the central bank will maintain a flexible monetary policy to help the U.S. economy navigate current challenges,” Tran told CCN.
That optimism has powered strong gains across major stock indices, including the Dow Jones.
Fed policymakers disagree about the path forward. | Credit: LSEG Datastream
But not everyone is convinced. Nigel Green, CEO of deVere Group, cautioned that markets may be overly confident.
“Markets, it would appear, have bought into Powell’s messaging. Stocks surged as he reassured investors that the inflationary effect of tariffs would be short-lived,” Green said.
However, if inflation remains stubbornly high, the outlook could shift quickly.
“If inflation persists at elevated levels, the Fed’s anticipated rate cuts could quickly evaporate,” Green warned. “The reality is that the U.S. central bank may be forced to keep rates higher for longer, upending market expectations and potentially triggering significant volatility.”
For now, the rally continues, but history suggests that investors may need to brace for a prolonged period of inflationary pressure.
Giuseppe Ciccomascolo began his career as an investigative journalist in Italy, where he contributed to both local and national newspapers, focusing on various financial sectors.
Upon relocating to London, he worked as an analyst for Fitch's CapitalStructure and later as a Senior Reporter for Alliance News. In 2017, Giuseppe transitioned to covering cryptocurrency-related news, producing documentaries and articles on Bitcoin and other emerging digital currencies. He also played a pivotal role in establishing the academy for a cryptocurrency exchange website. Crypto remained his primary area of interest throughout his tenure as a writer for ThirdFloor.
