Bitcoin Down 4% After Fed Interest Rate Report

Bitcoin [$BTC] Ⓒ 2023 – Crypto Coin Opps
Bitcoin [$BTC] Ⓒ 2023 – Crypto Coin Opps
Bitcoin [$BTC] Ⓒ 2023 – Crypto Coin Opps

Bitcoin experienced a modest decline in value after the US Federal Reserve announced a new interest rate hike. The Fed raised United States interest rates by 0.25% leading the nation to one of the highest rates of the past decades.

As a result, Bitcoin fell by as much as 4% in just a couple of hours, dropping below the $28,000 mark. The asset is currently trading at around $27,296 and appears to have mostly recovered from the major drop this afternoon.

As a result, the 24-hour trading volume for the world’s largest cryptocurrency saw an increase in selling volume, growing $6 billion from the previous date.

While some analysts believe that this volatility may continue in the short term, others remain optimistic about Bitcoin’s long-term prospects. Despite the challenges facing the industry, many investors still believe that the underlying technology behind cryptocurrencies has the potential to revolutionize the financial industry.

Bitcoin Likely Already Took Everything The Fed Could Throw

The year 2022 was devastating for BTC and the cryptocurrency market as a whole.

In order to attempt to control the inflation inherited from the COVID epidemic, the Federal Reserve started to severely raise interest, as high as 0.75% by mid-2022. As a result, Bitcoin plummeted throughout the year.

However, around September, the Fed had already announced a “slowing down” of interest raises, and since then began shortening the raises, reaching 0.25% in November.

This ultimately indicates that riskier assets have already faced the bulk of the threat of what the interest raises could pose.

Adding to that, the most recent crisis by the U.S. banking sector — which is mostly attributed to the high interest raises — indicates that the government will most likely have to rethink its inflation-control procedures for the remainder of the year.

In addition, as the market continues to evolve, there is growing confidence that Bitcoin and other digital assets will become a more established part of the financial landscape, with more and more institutions embracing cryptocurrencies.

However, in the short term, it is likely that we will see more volatility in the coming months as the industry navigates these challenges.

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