Bitcoin volatility intensifies after the Fed raises interest rates by 75 basis points
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Answer Bitcoin volatility intensifies after the Fed raises interest rates by 75 basis points
In the last 48 hours things have been crazy for the crypto market in general and Bitcoin in particular.
Bitcoin’s volatility started significantly since the beginning of the week but intensified on Wednesday after the Federal Reserve announced a 75 basis point interest rate hike.
For information, this is the highest interest rate hike by the Central Bank, which was the last time the interest rate was raised by this amount in 1994, which indicates its urgency and its attempt to combat rapidly rising inflation.
At the time of writing this article, Bitcoin is trading at $22,000 after hitting a low of $2,079.
Read:Bitcoin rises above 21 thousand dollars and maintains its positive path for this reason!
Bitcoin tends to fluctuate around the time the Federal Reserve announces its interest rate decision.
Often, the real effects of an advertisement are not felt until a few days after it occurs.
For example, last month, the Federal Reserve announced an interest rate increase of 0.5% – the highest rate in 22 years at the time.
At the time, Bitcoin rose briefly after the Fed’s decision was revealed but sank in the following days along with the stock market.
Some believe that the markets may have already priced in rate hikes after CPI inflation was reported at 8.6% last Friday.
This alone indicates that the central bank may raise interest rates faster than previously planned, despite ruling out increases of 75 basis points at the previous meeting.
At the FOMC press conference yesterday, Chairman Jerome Powell emphasized that the Fed will continue to work urgently to bring down the inflation rate.
This includes reducing the size of the Fed’s balance sheet and implementing more than 75 basis points of interest rate hikes in the future.
Decisions will be made meeting after meeting by the Federal Reserve, with the possibility of a 50 basis point increase continuing next month, which means more volatility in Bitcoin prices.
Read:Study: 37% of survey respondents want their government to certify Bitcoin
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