Altcoins Surge as Crypto Market Regains Steam

AVAX climbed 24% to hit a record of $79.58.

Sep 23, 2021 at 12:00 p.m. UTC
Updated Sep 23, 2021 at 6:02 p.m. UTC

The crypto market is bouncing alongside equities Thursday, a day after the Federal Reserve announced monetary policy in the U.S. is about to become a lot tighter.

While bitcoin and ether are trading 1% higher over the past 24 hours, prominent alternative cryptocurrencies like ADA, SOL and LUNA are up between 6% and 25%.

AVAX, the native token of the Avalanche open-source platform, added 24% to hit a record of $79.58, according to data from Messari.

Altcoins are outperforming bitcoin on the way up after they took a relatively bigger hit during the sell-off earlier this week. The price action highlights bitcoin’s long-held status as a crypto market haven, given its higher market cap. The cryptocurrency’s price is a lot more stable than the prices of most altcoins.

“The added volatility of a lesser known coin makes it much more risky, and so they tend to fall a lot harder when things are moving down and rise much sharper on the way up,” said Mati Greenspan, CEO of Quantum Economics.

S&P 500 e-mini futures also traded in positive territory, adding as much as 0.5%.

The Federal Reserve on Wednesday said it will prepare the ground to possibly start phasing out some of the stimulus program support that it has given during the pandemic.

Fed Chairman Jerome Powell also said that the central bank’s quantitative-easing (QE) program will likely conclude by mid-2022. Low interest rates and QE in the U.S. add to bitcoin’s appeal as an inflation hedge, according to Matthew Lam, a research analyst at Aspen Digital.

“We believe BTC continues to gain institutional appeal as a hedging asset and the end of QE next year is not likely to become a major driver of BTC price,” Lam said.

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Lyllah Ledesma is a reporter on CoinDesk's Markets team.