Bitcoin Falls to $19k as Federal Reserve Announces 75 BPS Rate Hike

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Fol­low­ing a two-day Fed­er­al Open Mar­kets Com­mit­tee (FOMC) meet­ing, the Fed­er­al Reserve has risen its bench­mark inter­est rate by anoth­er 75 BPS. 

Bitcoin’s price react­ed errat­i­cal­ly to the news, drop­ping by $1000 mere moments after the announcement. 

  • The hike, revealed at 18:00 UST on Wednes­day, takes the cen­tral bank’s new pol­i­cy rate up between 3.0% to 3.5%. 
  • Most investors expect­ed a 75-point rise head­ing into the meet­ing, but mar­kets had priced in a rough­ly 15% chance of a full per­cent­age point rate increase. 
  • Mere­ly 1 minute after the announce­ment, Bit­coin fell from rough­ly $19,700 to $18,700. It’s since recov­ered to about $18,946, at the time of writing.
  • Volatil­i­ty fol­low­ing a Fed­er­al Reserve deci­sion is famil­iar ter­ri­to­ry for Bit­coin. The price fluc­tu­at­ed rapid­ly after Fed Chair­man Jerome Powell’s speech at Jack­son Hole last month, where he reit­er­at­ed his com­mit­ment to address­ing inflation.
  • Reduc­ing infla­tion has been the theme of Fed pol­i­cy for months, as infla­tion has marked his­toric highs through­out 2022. August CPI came in at 8.3% last week – high­er than ana­lysts were expecting. 
  • Tight­en­ing mon­e­tary pol­i­cy has caused both stocks and cryp­to to plum­met through­out the year. Bit­coin is now 70% down from its Novem­ber high of $69,000, while the NASDAQ is down 28% year to date. 
Bit­coin / USD. Source: TradingView
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