Market Wrap: Bitcoin stabilizes following Fed rates hike
The cryptocurrency is in partial recovery, currently trading at just under $22,000. Experts say the rally is down to improved macro clarity.
Bitcoin (BTC) has pared some of its losses from early on June 15 following the decision of the U.S. Federal Reserve to raise interest rates by 75 basis points. Consequently, the fed-funds rate will increase to the range of 1.5%-1.75%.
- Bitcoin dropped as low as $20,270 after Fed Chairman Jerome Powell revealed the decision by the Federal Open Markets Committee (FOMC) to raise interest rates. FOMC is the committee that determines interest rates and the growth of the money supply in the U.S.
- However, the largest cryptocurrency by market capitalization recovered some of the losses and now trades for just under the $22,000 mark (press time, 10:35 PM GMT +1).
- Experts attribute the partial recovery to the clarity that Fed’s decision brings to the market.
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- Josh Olszewicz, head of research at Valkyrie, told Coindesk: “Markets loathe uncertainty and unpredictability. Digital assets have significantly correlated with U.S. financial markets in recent months, both of which have continued to bleed lower. A decrease in downward volatility will only likely be achieved with a pause or reversal of the current Fed policy and direction.”
- Ether, the Ethereum blockchain’s native token, also recovered some losses, trading around the $1,900 market at press time.
- Prior to the Fed rates decision, Crypto Africa published a breakdown of how interest rates affect the crypto market. Read it here.
