Bitcoin prices got a lift after the Federal Reserve said on Wednesday that it was keeping interest rates near zero on Wednesday, despite rising inflation. The cryptocurrency is currently just under $40,000, an increase of 4.1% over the past 24 hours, a sign that at least some investors still see value in bitcoin as an inflation hedge.
But Fed Chair Jerome Powell also said at a news conference Wednesday that the recent inflation—he cited higher prices for things like airline tickets, cars and hotels—is likely only temporary and reflects the unusual circumstance of the economy reopening amid the Covid-19 pandemic.
“The supply side will respond and the economy will adapt,” he said.
That injects some uncertainty into the future of bitcoin.