Search Inside Bitcoins

Why Crypto Prices Are Off the Boil as Powell Speaks

Why Crypto Prices Are Off the Boil as Powell Speaks
Why Crypto Prices Are Off the Boil as Powell Speaks

Join Our Telegram channel to stay up to date on breaking news coverage

Crypto prices are expected to start reacting to the latest decision of the Federal Reserve to hike interest rates by 75 basis points. In the last 24 hours, the global cryptocurrency market cap has dropped 0.1% to $1.053 trillion.

Crypto prices cool off after last week’s rally

Last week, many cryptocurrencies rallied to notable highs, with the market cap soaring past $1 trillion after weeks of consolidating at the $900 billion range. Bitcoin and Ether rallied to weekly highs of $20,800 and $1,645, respectively.

However, the market is now uncertain, and while the prices have only retraced marginally, there is the possibility that the prices could plunge lower if the outlook across the financial market turns bearish after the Fed announced its decision on interest rates.

Crypto prices have plunged significantly this year, with these dips being attributed to the Fed’s hawkish stance. The Fed has raised interest rates by 75 basis points several times this year, which has deterred investors from putting their money into risk assets such as cryptocurrencies.

Fed raises interest rates by 75 basis points

On Wednesday, the Federal Reserve increased the benchmark policy rate by 75 basis points for the fourth consecutive time. After holding a two-day meeting, the Federal Open Market Committee voted to raise the federal funds rate to a new target range of 3.75% to 4%.

The Fed has been aggressively raising interest rates to combat the pressure on the economy following a spiraling rise in inflation. The institution has said that the continuous increase in the fed fund rates was necessary for a “sufficiently restrictive” effect on the economy and to drop inflation to 2%.

However, economists have also argued that the aggressive hike in interest rates was concerning. Some have argued that the Fed could trigger an economic downturn if the hikes continue.

There are expectations that the Fed will reduce the rate of increase in interest rates in the coming months. In July, the Fed had hinted that it would slow down the hike. However, such a move is expected to happen in December and progress to 2023.

The Fed raised interest rates from near zero in March. As the rates continue to rise, economists have now argued that the Fed needs to relax its policies as such measures usually take time before they can impact the economy.

Related

Dash 2 Trade - High Potential Presale

Our Rating

Dash 2 Trade
  • Active Presale Live Now - dash2trade.com
  • Native Token of Crypto Signals Ecosystem
  • KYC Verified & Audited
Dash 2 Trade

Join Our Telegram channel to stay up to date on breaking news coverage

Read next

X

Can This New Token Presale 100x?

Can This New Token Presale 100x?

Can This New Token Presale 100x?

X