Bitcoin rose 4.6% to $20,201, trading above the $20,000
level for the first time in three weeks, while Ethereum jumped 10.7% to a 1-½
month high of $1,485 by 22:27 ET (02:27 GMT).
Gains in both tokens reflected a broader uptrend in the
crypto market as the dollar retreated. Data from Coinmarketcap shows that total
crypto market capitalization is less than $30 billion shy of reaching the $1
trillion mark.
Markets are pricing in expectations that a pronounced
economic slowdown in the United States will spur the Fed into softening its
hawkish stance. While the central bank is still widely expected to raise rates
by 75 basis points in November, traders are betting the bank will slow its pace
of rate hikes the following month.
Data on Tuesday showed U.S. house prices fell last month.
The reading followed PMI data that showed an extended contraction in U.S.
industrial activity in September.
The prospect of a less hawkish Fed weighed on the dollar,
with the greenback falling for the last four sessions. Both the dollar index
and dollar index futures were flat on Wednesday, trading at over two-week lows
of 111.
Weakness in the dollar helped crypto markets break a tight
trading range seen for over the past two months. But like previous breakouts,
it remains to be seen if the market can sustain its uptrend.
Markets were also encouraged by reports that several wealthy
Asian investors were buying into crypto, particularly Bitcoin.
The world’s largest cryptocurrency had last month risen as
far as $22,700 before tumbling back to near annual lows. The token and the
broader crypto space suffered heavy losses this year as the Fed began
tightening monetary policy.
Focus is also on regulatory updates to the crypto space,
amid an ongoing clash with the Securities and Exchange Commission.