The cryptocurrency market is at a crossroads, as both the Bank of Japan (BoJ) and the U.S. Federal Reserve decided to keep interest rates unchanged. The move, reflecting the global economic balancing act between growth, inflation, and geopolitical uncertainty, has brought a mix of market caution and guarded optimism.

Bank of Japan Opts for Stability, But Risks Remain

Following a two-day meeting, the BoJ announced it would maintain its benchmark rate at 0.5%, a decision that was unanimously approved. The move came shortly after a trade agreement between Tokyo and Washington, which reduced some tensions around tariffs — yet left many questions unresolved.

Economist Tohru Sasaki pointed out that despite the moderate tone, the BoJ remains essentially hawkish, especially if inflation continues to hover above its 2% target. He emphasized that the central bank is keeping the door open for future rate hikes, should economic conditions shift unexpectedly.

Japan also plans to deploy a $6.3 billion stimulus package in response to potential fallout from U.S. tariffs — a move that could positively influence the digital asset sector.

Fed Holds Steady, But Easing Options Are Narrowing

The U.S. Federal Reserve also held its rates steady in the 4.25–4.5% range, marking the fifth consecutive meeting without a change. Most committee members supported the decision, though a minority pushed for a 25 basis point cut, highlighting internal divisions over the future path of monetary policy.

Analysts note that with persistent inflation pressures and rising geopolitical risks, the Fed is likely to remain extremely cautious about any rate cuts.

Market Response: Modest Gains, Signs of Fatigue

The global crypto market capitalization currently stands at $3.89 trillion, up 0.76%. Leading cryptocurrencies like Bitcoin, Ethereum, and XRP are posting mild gains, but there are clear signs of weakening momentum.

🔹 Bitcoin dropped to a daily low of $116,000 before recovering to $118,415.

🔹 Ethereum fell to $3,691 following the BoJ’s decision, but rebounded to $3,860 (+1.43%).

🔹 XRP touched a six-day low of $3.022, before climbing back to $3.14.

According to Nick Ruck of LVRG Research, the Fed’s cautious stance may slow the pace of the bull market, but growing liquidity could still hold the floor for a potential recovery.

Meanwhile, Henrik Andersson of Apollo Capital remained optimistic, noting that markets had already priced in the rate hold, so there was no major surprise. He added that ongoing uncertainty about U.S. trade policy continues to delay expectations for rate cuts.

What’s Next?

The decisions by two of the world’s most influential central banks to hold rates steady do not send a bearish signal, but they also don’t guarantee sustained growth. Investors remain in a “wait and see” mode, with upcoming inflation data, tariff developments, and monetary policy from Europe and Asia under close watch.

While the crypto market remains highly volatile, a sharp correction currently appears unlikely — barring any major geopolitical shock.

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