The value of bitcoin edged higher on Wednesday, as the US dollar lost traction after the Federal Reserve kept interest rates on hold but indicated growing confidence in the economy.
The BTC/USD exchange rate advanced 0.6% to $655.20, according to CoinDesk. The pair traded within a narrow range of $647.92-$659.51 on Wednesday.
Bitcoin’s value has remained relatively steady after the cryptocurrency’s second ever reward having on July 9. Over that period prices have more or less traded steady, as investors searched for new market catalysts.
Since January 1, the cryptocurrency has gained more than 50% in value, reflecting large gains at the end of the second quarter.
The US dollar turned lower Wednesday afternoon, as investors reacted sharply to the Federal Reserve’s decision to leave interest rates unchanged. The Fed indicated that “near-term risks to the economic outlook have diminished,” but also stated that inflation would remain below target for the foreseeable future.
The dollar index, a trade-weighted average of the US currency against six global peers, fell 0.4% to 96.74. The dollar had initially spiked following the rate statement before turning sharply lower.
Bitcoin was in the news this week after a Florida judge dropped state money-laundering charges against a man accused of selling more than $1,500 worth of bitcoins to undercover detectives. According to Miami-Dade Circuit Judge Teresa Mary Pooler, bitcoin is not considered money. Although the coin has “some attributes in common” with money, it differs in many important respects.
The view that bitcoin does not qualify as money runs contrary to the coin’s price performance over the past eight months. Bitcoin is enjoying unprecedented stability, reflecting growing interest among investors, banks and even governments.
Bitcoin remains unregulated throughout much of the world, as policymakers continue to navigate its legal complexities. The National Treasury of the Republic of South Africa is the latest government body to warn its citizens about using cryptocurrencies.
Virtual currency experts suggest South Africa may look to regulate the use of bitcoin in the future, adopting similar approaches to other states. Bitcoin has entered into the regulatory purview of the United States, Canada, Australia and European Union.
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