Crypto Rallies as Fed Softens Stance and Middle East Ceasefire Begins

• The crypto market rally was fueled by U.S. President Donald Trump’s announcement of a ceasefire between Iran and Israel, signaling reduced geopolitical tensions.
• The Federal Reserve announced the removal of “reputational risk” as a supervisory consideration for banking institutions, providing an additional catalyst.

The crypto market kicked off a bullish run on Tuesday, June 24. The rebound in Bitcoin’s price and altcoins comes as geopolitical tensions subside and a change in the U.S. Federal Reserve’s regulatory approach encourages investors’ confidence.

Crypto Market Rallies Amid Iran-Israel Ceasefire

The value of crypto assets rose when the U.S. President Donald Trump declared an end to the long-standing enmity between Israel and Iran, which had been rocked by attacks in the previous fortnight, as reported by CNF. Trump, in a post on his Truth Social site, confirmed that “the ceasefire is now in effect.” In the statement, the two countries have been called to respect the agreement and not escalate further.

Bitcoin fared well in the development, rising 4.33% and hitting a high of $105,927, based on data on CoinGecko. Other digital assets and altcoins also reported solid gains as the market undertook a risk-on sentiment on improving geopolitical scenario in the Middle East. 

The ceasefire came after reports of increasing numbers of casualties and damage to the area in a 12-day clash. But there is a shaky truce. Still, there were news agencies, which claimed about new Israeli warfares, even after these ceasefire statements. Through Reuters, Foreign Minister Abbas Araqchi of Iran threatened to stop their retaliatory measures when Israel would stop its activities at 00:30 GMT on Tuesday.

“If Israel stopped its illegal aggression against the Iranian people… Iran had no intention of continuing its response afterward,” Araqchi stated. However, Iran violated the ceasefire, initiating an attack on Tehran. Nonetheless, it had little impact on the crypto market as the changes related to laws in the U.S. boosted the mood in the market.

Fed Announces Major Regulatory Change

On Monday, the Federal Reserve made a significant revision in its supervision system of the banking institutions. It removed the so-called “reputational risk” as an official consideration in the process of banking institutions’ examination.

In a statement, the Fed clarified that it had “started the process of reviewing and removing references to reputation and reputational risk from its supervisory materials,” including examination manuals. The central bank plans to replace those references “with more specific discussions of financial risk.”

This regulatory change marks a departure from policies associated with the informal Operation Choke Point 2.0, which had limited banks’ ability to work with digital asset firms. The fact that this removes reputational risk as a factor can potentially make it easier on the part of a bank to get involved in providing custodial and transaction services to crypto companies.

Nonetheless, the Fed insisted that institutions continue to maintain the healthy practices of risk management to safeguard operational integrity based on legal adherence. Moreover, policymakers in principle supported the move. Senator Cynthia Lummis, a vocal advocate of cryptocurrency, termed the ruling as an upgrade. “This is a win, but there is still more work to be done,” she posted on her X account.