What does the near future look like for the Bitcoin price after this decision?
Cryptocurrencies have come from far exceeding the financial collapse unleashed two weeks ago, after the fall of Silicon Valley Bank, Signature Bank (an entity linked to crypto) and Credit Suisse, when they became an instrument to shelter value in the middle of the exit massive deposits.
The Bitcoin price has fallen again in the last few hours after the massive gains of the last few weeks. This was mainly due to the US Federal Reserve’s decision to raise US dollar interest rates again by 0.25 percentage points.
Following the banking crisis in the US, where Silicon Valley Bank and other small banks had to face bankruptcy, the US Federal Reserve is standing firm and has raised the key interest rate for the US dollar by 0.25 percentage points. This increase was the last expected by the market.
However, concerns were also raised about whether the policy of tightening the dollar should continue. Because the increase in interest rates was probably the trigger for bank failures. As a result, concerns were raised about whether the Fed should not call off hikes after all. In the end, the Fed stuck to its plan to raise interest rates.
How Did the Bitcoin Price Move as a Result of the Decision?
The price of Bitcoin increased enormously as a result of the banking crisis. That was because trust in banks had waned, and many investors were now turning to bitcoin, which is being used more and more as a store of value. However, many investors also expected the Federal Reserve to ease monetary policy for the US dollar again.
The price of Bitcoin fell briefly from over $28,000 to $27,000. This short-term drop was to be expected after the Fed’s decision. Because speculative investors had bet on the cessation of monetary tightening. However, the price has been able to rise slightly again in the last few hours.
How is the Bitcoin Course Going?
The Fed, in its policy sustained for months now to try to curb inflation, has raised interest rates again. However, it has done so at a moderate level of 0.25%, as various analysts expected it to happen.
So far, the market seems to be settling around the measure, although it has not taken a particular direction. Specialists, such as the economist Gael Sánchez Smith, see a break of $29,000 per BTC as possible.
The Bitcoin price has increased tremendously in the last 2 weeks. No doubt the increase was also due to the fact that investors expected that the Fed would no longer accept rate hikes after the banks’ collapse. Following the decision that interest rates will continue to rise, little will change for now.
By Audy Castaneda