, the world’s largest cryptocurrency in terms of market value, rose by 0.8% to $29,499. The price is currently trading at around $29,380 with a slight decrease.
- The Fed’s decision today marked the 11th interest rate hike in the past 17 months after a short break. In addition, interest rates have reached their highest level in the past 22 years.
- Fed Chairman Powell stated that if necessary, there could be an interest rate hike in September and they will continue with a tight monetary policy unless the data suggests otherwise.
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Fed’s interest rate decision was announced, followed by Fed Chairman Powell’s press conference; what’s next for Bitcoin?
Fed Announced Interest Rate Decision Today
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After the Federal Reserve raised interest rates by 25 basis points, the price of Bitcoin rose modestly. Following the meeting of the Federal Open Market Committee on Wednesday, the federal funds rate target range has now increased to 5.25%-5.5%.
Bitcoin, the world’s largest cryptocurrency in terms of market value, rose by 0.8% to $29,499. The price is currently trading at around $29,380 with a slight decrease. BTC has been trading within a narrow range of approximately $29,000-$31,500 for the past month.
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The Fed’s decision today marked the 11th interest rate hike in the past 17 months after a short break. In addition, interest rates have reached their highest level in the past 22 years. The central bank stated that inflation remains high and it is “strongly committed” to reducing it to the targeted 2%.
Following the Fed’s interest rate decision, Fed Chairman Powell made statements during the press conference. The important points from these statements are as follows;
- If necessary, we can tighten monetary policy further.
- Inflation continues to remain well above our medium-term target of 2%. Despite high inflation, inflation expectations appear anchored.
- We will continue to see the effects of interest rate hikes on the economy in the coming period.
- We can raise interest rates for the 2% inflation target.
- If the upcoming data does not suggest otherwise, we can raise interest rates in September.
- If positive inflation data, similar to June, comes in, we will ask whether general signals require an interest rate hike. If the answer is no, we will not raise rates. Based on the data, we may continue to raise rates or hold off.
- Core inflation is still high. Monetary policy should continue to be tightening for a while longer.
During these statements, the S&P 500 index rose to 4,583. The NASDAQ also saw an increase to 14,185. However, despite this movement, US markets continued to trade sideways. The uncertainty in Powell’s statements reduced volatility in the markets.
What’s Next for Bitcoin?
Bitcoin and cryptocurrency investors were confident that the Federal Reserve would not continue with interest rate hikes after inflation dropped to 3% in June, following the interest rate hike in July. However, Powell’s statements did not reflect this.
Fed Chairman Powell stated that if necessary, there could be an interest rate hike in September and they will continue with a tight monetary policy unless the data suggests otherwise. These statements did not bring about a decline in the markets, but there are indications that they could increase pressure on Bitcoin.
Another point that Bitcoin investors will now focus on is the applications for spot Bitcoin ETFs. In June, BlackRock’s application for a spot Bitcoin ETF created a bullish sentiment in the market, and many investment management firms joined the race for spot Bitcoin ETFs, including Fidelity.
Now the SEC is reviewing these spot Bitcoin ETFs. The SEC has about a year to respond to these applications, and although they have not been approved yet, the community is confident in the possibility of these ETFs being approved.