On June 16th, the US Federal Reserve raised the interest rate by about 0.75%. This is the single largest increment in the last 30 years. Meanwhile, the Reserve Bank noted that more increments would come later in the year.
The hike was aimed at counteracting the increasing inflation in the country. Meanwhile, following the announcement of the hike, the price of BTC fluctuated significantly. BTC’s price almost touched the $20k mark.
After the news of the rate hike, Bitcoin fell to $20,069, according to CoinGecko. Meanwhile, the currency has recovered. As of the time of writing, Bitcoin is trading at $21,220. It has been down by over 25% in the past week.
BTC’s Volatility After Rate Hike By US Federal Reserve
As analysts report, BTC always encounters volatility whenever the Fed changes its interest rate. Unfortunately, the real impact of such disclosures is not noticed immediately. It is only after some days that visible changes are seen.
According to Yahoo Finance, Noelle Acheson, an analyst at Genesis Trading, made a statement. Acheson believes the crypto market is still greatly influenced by the macro market. However, he said the news came at a good time when the market was falling.
In May, the Fed announced an increased rate of 0.5%. This is the highest increase in the past 22 years. After that announcement, the price of Bitcoin increased temporarily. Unfortunately, it did not last as it fell together with the stock market days later.
On the flip side, the hike announced today might have a different result. Judging by Friday’s CPI of 8.6%, analysts believe the market has made provision for a rate rise.
Furthermore, the past week has been devastating for the crypto community. The crypto market, in general, has taken a huge strike. As a result, most investors are selling off risky digital assets.
Is The Crypto And Stock Market Connected?
Jerome Powell, Federal Reserve’s chair, made an announcement at Wednesday’s press conference. According to him, the rate of inflation is on the increase. Consequently, this has affected the labor market.
Unfortunately, the prediction that the interest rate would increase by 100 points did not occur. Hence, the stock and altcoin market experienced a small price increase.
Currently, there are speculations that the crypto and equity market are connected. This is because both markets have fallen and risen almost simultaneously. Today was not different.
Earlier this morning, the Dow Jones Industrial Average and the S&P500 dipped after the Fed news. Also, Bitcoin followed a similar pattern. Meanwhile, both markets have recovered.
