Bitcoin Stable As Federal Reserve Raises Rates Again

Bitcoin and other cryptocurrency markets are holding steady following today’s announcement by the Federal Reserve that the central bank has raised interest rates by 25 basis points.

The move, in line with market expectations, will raise interest rates from 4.5% to 4.75%. The Federal Reserve has aggressively launched interest rate hikes last year to cool record-high inflation that has negatively impacted the value of stocks, equities, and crypto assets.

Bitcoin, the largest cryptocurrency by market capitalization, is trading at $23,029 at the time of writing, up 0.3% in the past hour, according to CoinGecko. It is down 66.4% from its all-time high of $69,044.

Ethereum, the second largest digital asset, rose by the same amount and traded at $1,577. ETH is down 67.6% from his peak of $4,878.

Both assets have risen over the past week. Bitcoin he is up nearly 2%. Ethereum at 1.3%.

CoinShares Head of Research James Butterfill said: Decryption The Federal Reserve’s statement today added that there was “nothing new to really move the market”. , tried to portray hawkishness by stating that the market does not accept it,” he added.

But the U.S. stock market, where digital assets followed this year and last year, surged after falling following the news. At the time of writing, the S&P 500 is up 0.2% of his while the Nasdaq is up 0.2% of him.

White Lion Capital co-founder John Nance said: Decryption “The big question on everyone’s mind is, where is the bottom of risk assets?”

“In terms of Fed monetary policy, the market cycle troughs and peaks so far have come around the peak/trough in interest rates,” he said.

Since Bitcoin is a “risk-on” asset, it usually follows the stock market. This means that prices can fluctuate like stocks. Investors sold ‘risk-on’ assets as the Fed hiked interest rates to curb his 40 years of high inflation.

This is because when interest rates are high, investors prefer ‘safe haven assets’ such as gold and the US dollar.

And today the Fed announced it would continue to raise rates, but not as aggressively as it did last year.

The Federal Reserve expects “continued increases in the target band to be appropriate to achieve a sufficiently restrictive monetary policy stance to bring inflation back to 2% over time.” I am doing,” he said. Said in a statement.

“Inflation is still too high. The work is not done yet,” Powell said at a news conference on Wednesday.