XRP and Bitcoin Rise. How the Fed Could Hurt Cryptos. — Barrons.com
By George GloverXRP and Bitcoin were among the cryptocurrencies rising Wednesday as investors braced for the Federal Reserve's latest interest-rate decision.XRP, which is used to settle transactions on Ripple Labs' digital-payments platform, climbed 2.7% to $3.10 in early trading, per data from the crypto exchange Kraken. Bitcoin was up 2.4% to $102,616.The gains came with the Fed set to announce its first policy decision of 2025. The central bank's January meeting has been somewhat overshadowed by the DeepSeek stock market selloff — but policymakers' next move could still impact crypto prices.The Fed is widely expected to hold interest rates at their current level of between 4.25% and 4.5%, after cutting in each of the last three meetings. However, Chair Jerome Powell could use his press conference to signal to the market that borrowing costs are likely to remain unchanged for much of 2025 — and if he does, expect crypto prices to fall. When interest rates are higher, riskier assets tend to suffer because safer parts of the market, like bonds, are likely to offer investors steadier returns.Bitcoin soared in the run-up to Donald Trump's inauguration on hype about the new President's crypto-friendly campaign pledges, but it has moved more in tandem with the stock market this week.The world's largest token plummeted Monday after the rapid rise of Chinese start-up DeepSeek's latest model sparked fears of a slowdown in spending on artificial intelligence, then rebounded the following session as equities mounted a comeback.Other cryptocurrencies were also rising Wednesday. Ethereum climbed 2.7% in early trading, while Solana was up 2.8%. Dogecoin — a so-called meme token that has / that is been touted by Trump ally Elon Musk in the past — added 3.9% to trade at just under 33 cents.Write to George Glover at [email protected] content was created by Barron's, which is operated by Dow Jones & Co. Barron's is published independently from Dow Jones Newswires and The Wall Street Journal.