Bitcoin's price held steady on Wednesday following the U.S. Federal Reserve's decision to maintain current interest rates, reflecting the central bank's cautious optimism about achieving its long-term inflation target of 2%.

As anticipated by most analysts, the Federal Open Market Committee (FOMC) opted to keep the benchmark federal funds rate in the range of 5.25% to 5.50%. In a statement, the Fed noted that recent economic indicators show continued solid economic activity, with strong job gains and low unemployment. However, while inflation has eased over the past year, it remains elevated, with only modest progress made toward the Fed's 2% inflation objective.

The central bank reaffirmed its dual mandate of maximum employment and stable inflation, indicating that the risks to achieving these goals have become more balanced over the past year. Despite this, the economic outlook remains uncertain, and the Fed remains highly attentive to inflation risks.

James Butterfill, Head of Research at CoinShares, highlighted the precarious situation facing the Fed amid looming stagflation threats. He warned that the Fed's limited options could lead to financial instability, potentially impacting the banking sector and the broader economy. "The Fed now has very little firepower if inflation rises, potentially breaking the banking sector again and causing problems in other areas of the economy at a time when it is already in a weakened state," Butterfill told The Block.

On the investment front, Ionic Digital CEO Matt Prusak suggested that the Fed's efforts to engineer a soft landing might create attractive opportunities for long-term Bitcoin investors during any significant price drawdowns. "Any material Bitcoin drawdowns are likely attractive accumulation opportunities for long-term investors," Prusak told The Block.

Following the Fed's announcement, major stock indices also held steady. The S&P 500 gained 1%, the Nasdaq Composite rose 1.7%, and the Dow increased by less than 1% during mid-day trading in the U.S. on Wednesday. Meanwhile, the CBOE Volatility Index (VIX), which measures the expected volatility of the S&P 500 over the next 30 days, fell 3.5% to 12.40 points. Gold prices increased by 0.5% over the past 24 hours, reaching $2,327.42 per ounce.

Bitcoin traded around $69,159.19 at publication time, marking a 3.47% increase over the past day, according to data from The Block. The stability of Bitcoin's price amid the Fed's cautious economic outlook highlights the cryptocurrency's potential resilience in an uncertain macroeconomic environment.