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Bitcoin, ether and other coins inched higher, clawing back some of the losses after crypto assets sank during Federal Reserve Chairman Jerome Powell’s press conference yesterday. 

Bitcoin was trading around $27,504 by 9:15 a.m. EDT, up 1% in the past few hours, according to TradingView data. It had flirted with $29,000 yesterday ahead of the Fed’s decision to raise interest rates, before briefly plunging below $27,000 following Powell’s press conference.

BTCUSD chart by TradingView

Inflation is still high, and the Fed had to act, Galaxy Digital’s Head of Research, Alex Thorn, told The Block.

“Despite issues we’ve seen in the banking sector, Jerome Powell isn’t stopping the tanker just yet,” Thorn said.

Bitcoin retraced a bit, Thorn said, but it continues to hold up well, he added.

“If the banking crisis plays out further, there’s no reason why the bitcoin safe-haven narrative can’t also continue, pushing prices higher,” Thorn said. 

Between a banking crisis and an inflation headache

Powell said yesterday that the past few weeks of banking woes and potential credit tightening could impact inflation in its own way, which might lead the central bank to assess its increases. Powell wouldn’t say whether this meant rates would pause. 

UBS analysts see the light at the end of the tunnel based on a tweak to the committee’s statement, which removed reference to “ongoing increases,” instead noting that “some additional firming may be appropriate.” 

Powell elaborated on the tweak in his press conference, saying the line referred to additional interest rate hikes, though he emphasized the “may” in the sentence from the FOMC statement. 

Nomura analysts expect significant headwinds due to the limited supply of bank credit. As such, they maintain the view that the “Fed has already reached the terminal rate policy rate of the current hiking cycle and will hold that federal fund’s rate at 4.75-5.00% until March 2024.”

© 2023 The Block Crypto, Inc. All Rights Reserved. This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.

Recipients of the long-awaited Arbitrum airdrop have begun to claim their tokens, giving them governance powers on the DAO that will control the Arbitrum One and Nova networks.

The claim process began at about 9 a.m. EDT at block height 16,890,400. There are 1.16 billion ARB tokens in the airdrop, representing 11.6% of the total supply of 10 billion tokens. A further 113 million tokens are available to be claimed by some DAOs in the Arbitrum ecosystem.

Arbitrum, a Layer 2 scaling project on the Ethereum network, is rewarding early users while also handing control of future governance decisions to tokenholders. The ARB token will grant governance rights to holders, although it won’t have other use case like, for example, paying transaction fees on the network. 

The project will now transition to a self-executing DAO, which will automatically execute governance votes on-chain. There is, however, a 12-member council that can intervene in the case of emergencies like malicious governance actions being forced through.

The ARB token is set to trade on several centralized exchanges, including Coinbase, Binance, KuCoin, ByBit and OKX. There was also significant bidding for the token on decentralized exchanges prior to the claim process going live. Speculative activity also included over-the-counter deals, IOUs and options for the ARB token.

© 2023 The Block Crypto, Inc. All Rights Reserved. This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.