Bitcoin Returns to $81,000 After Fed Holds Rates — 2nd Update

By Joseph Wilkins and Dean SealBitcoin climbed back above $81,000 on Wednesday after the Federal Reserve unsurprisingly elected not to raise interest rates again.The flagship cryptocurrency was 0.7% higher at $81,245, bouncing back from around the $80,500 threshold during morning trading hours in the U.S. Stocks were slightly higher in the U.S., with equities generally rebounding this week as optimism around artificial intelligence returned to markets, and bitcoin eventually caught up.The Fed's rate-setting committee voted 10-2 to hold rates steady, with two dissents from officials who said they would've preferred to raise rates by a quarter point.The outcome was largely expected, due in part to the meeting's proximity to this year's midterm elections, though Chairman Kevin Warsh said politics played no part in the Fed's decision-making.Markets are currently pricing in a nearly 83% chance that the central bank will hike by a quarter point when it reconvenes in December, according to data from CME Group."That outlook has supported the U.S. dollar and provided a floor for Treasury yields, creating a less favorable backdrop for bitcoin," said Van Ha Trinh, markets strategist at trading platform Exness.Renewed optimism around artificial intelligence has improved broader risk sentiment, but momentum has so far failed to translate into meaningful demand for the cryptocurrency, he added.Bitcoin has held up fairly well since coming off an eight-month high in recent weeks, according to David Morrison, market analyst at financial-services provider Trade Nation. "While there's a danger of a break which could see it retest $75,000 in the first instance, the overall chart structure looks quite constructive from a bullish perspective," he added.Ether was 0.6% higher at $2,360.Write to Joseph Wilkins at [email protected] and Dean Seal at [email protected]