After the Federal Reserve hiked the benchmark interest rate by 0.75 percent, the greatest increase in 28 years, BTC and altcoins saw nominal gains.
The United States Federal Reserve raised interest rates by 75 basis points on June 15, the greatest increase in 28 years, as the central bank tries to contain the highest inflation rates in over four decades.
According to data from Cointelegraph Markets Pro and TradingView, Bitcoin (BTC) and the wider cryptocurrency market were under pressure in the early hours of June 15 as rumours of Three Arrows Capital (3ACpossible )’s collapse spread across the ecosystem, which is still reeling from the Celsius fiasco.
The price of Bitcoin temporarily surged to $22,520 after Federal Reserve Chair Jerome Powell announced a 75 basis point raise, before settling at $21,500.
Traditional markets reacted positively to the announcement, with the S&P 500, Dow, and NASDAQ all closing in the green for the day, but traders should wait until the daily close and tomorrow’s opening bell to see how markets react.
Analysts weigh in on the interest rate hike by the fed and its potential impact on cryptocurrency pricing.
Shortly after Powell announced the 75-basis-point raise, forecasts for when the Fed would start cutting rates began to pour in, with the consensus being that it would start in 2024.
The main cause for the hike in interest rates has been rising inflation, which according to the latest Consumer Price Index (CPI) print increased by 8.6% year over year, which was greater than analysts had projected.
Some analysts have speculated that the Fed’s decision to raise rates to their highest level in 28 years is part of a strategy to get ahead of the curve and build enough buffer to be able to pause hikes in the future if economic conditions worsen.
Overall, the rate hike appears to have been priced into the crypto market, as prices remained relatively flat following the announcement, and more crypto-specific developments are currently dominating the sector’s headlines.
The total cryptocurrency market capitalization is currently $931 billion, with Bitcoin commanding 44.5 percent of the market.
Source: Cointelegraph