Market Wrap: Stocks, Altcoins Rise Despite Rate Hikes and Ukraine Conflict

Investors are likely expecting a non-aggressive approach to interest rates following Wednesday’s change, leading to a jump in markets

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Federal Reserve Chair Jerome Powell | Blockworks exclusive art by Axel Rangel

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key takeaways

  • Investors may expect a largely dovish stance from the Fed following its initial rate hike, causing markets to jump
  • Bitcoin remained flat while major altcoins, such as ether and sol, saw a jump of around 2% or more

Bitcoin remained flat Tuesday while other cryptocurrencies and equities rose despite the likelihood of pending Federal Reserve rate hikes and a worsening conflict in Ukraine.

Fed Chair Jerome Powell is scheduled to speak Wednesday after the regulator unveils its next move on interest rates.

The Fed is expected to raise interest rates by a quarter percent in its first increase since 2018. Earlier this month, Powell testified before Congress, saying "I’m inclined to propose and support a 25 basis point rate hike."

The central bank is "prepared to move more aggressively by raising the federal funds rate by more than 25 basis points," he added in regard to the rapidly rising inflation.

But the ongoing situation in Ukraine and its effect on the market may push the Fed to be less aggressive with rates to avoid recession. Investors may expect the Fed to remain largely dovish after its initial rate hike, which could explain Tuesday's jump in stocks.

All major US indices were up on the day, with the S&P 500 rising 2.14% and the Nasdaq and Dow rising 3.16% and 1.82%, respectively.

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Bitcoin has slowly consolidated over the last few weeks, forming higher lows — but also lower highs. The most popular cryptoasset is likely due for a large spike in either direction. Bitcoin ended stock trading Tuesday down by 0.39%, with ether pushed 1.96% higher.

The Graph, an indexing protocol for querying Ethereum and other networks, was crypto’s biggest gainer of the day among the top 100 coins by market capitalization, with an 18.34% pop.

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Going forward

Investors should be prepared for Wednesday's rate hike announcement and Fed Chair Powell's speech, which are likely to move markets. The unfolding situation in Ukraine and its geopolitical implications are also straining on markets, leading to further uncertainty and volatility.


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