The Fed’s committee will undoubtedly publish its interest rate decision in light of the recent documented recovery in cryptocurrency prices earlier this year. The market is expected to experience a 25 bps rate increase in February 2022, following the 50 bps increase in December 2022.
The rate increase is meant to moderate the rate increase, which is predicted to raise the funds rate by a range of 4.25 to 4.5%. This news has drawn criticism from the cryptocurrency community because of the market crash in 2022 and the recent recovery of bitcoin prices.
The reason for the negative response was that, if the Federal Open Market Committee (FOMC) moves to raise the rate, there is a good likelihood that cryptocurrency prices will eventually fall following the ensuing press conference by Jerome Powell. Some renowned economists claim that Powell may make some “hawkish” comments on the anticipated additional hikes in March and April.
Other Highlights of the Meeting
- The reason for the negative response was that, if the Federal Open Market Committee (FOMC) moves to raise the rate, there is a good likelihood that cryptocurrency prices will eventually fall following the ensuing press conference by Jerome Powell. Some renowned economists claim that Powell may make some “hawkish” comments on the anticipated additional hikes in March and April.
- A 25 bps rate hike is already expected by the crypto community. On the other hand, despite the community already knowledgeable regarding the said hike, industry experts still believe, regardless of what Fed’s final announcement would be, it is expected to greatly affect the behavior by traders and investors alike. While some industry stalwarts are already expecting a massive price drop on Bitcoin one the rate hike is not what it is expected to be.
- On the other hand, the US Dollar Index (DXY) was also down by 0.36% making a steady way on the downward curve. Furthermore, several altcoins that were seen to have had a recent pump in the past few days were seen to have fallen minutes before the FOMC meeting. The said altcoins include Terra (LUNA), Frax Share (FXS), Kava (KAVA) and Quant (QNT).
