Bitcoin
Bitcoin (BTC)
$68,361.00 1.17598
Bitcoin price
Ethereum
Ethereum (ETH)
$3,747.43 -0.77066
Ethereum price
BNB
BNB (BNB)
$595.30 -0.07299
BNB price
Solana
Solana (SOL)
$166.90 -1.30298
Solana price
XRP
XRP (XRP)
$0.5194230 -0.79036
XRP price
Shiba Inu
Shiba Inu (SHIB)
$0.0000259 -7.5273
Shiba Inu price
Pepe
Pepe (PEPE)
$0.0000144 -3.05383
Pepe price
Bonk
Bonk (BONK)
$0.0000338 -8.64999
Bonk price
Bitcoin
Bitcoin (BTC)
$68,361.00 1.17598
Bitcoin price
Ethereum
Ethereum (ETH)
$3,747.43 -0.77066
Ethereum price
BNB
BNB (BNB)
$595.30 -0.07299
BNB price
Solana
Solana (SOL)
$166.90 -1.30298
Solana price
XRP
XRP (XRP)
$0.5194230 -0.79036
XRP price
Shiba Inu
Shiba Inu (SHIB)
$0.0000259 -7.5273
Shiba Inu price
Pepe
Pepe (PEPE)
$0.0000144 -3.05383
Pepe price
Bonk
Bonk (BONK)
$0.0000338 -8.64999
Bonk price
Bitcoin
Bitcoin (BTC)
$68,361.00 1.17598
Bitcoin price
Ethereum
Ethereum (ETH)
$3,747.43 -0.77066
Ethereum price
BNB
BNB (BNB)
$595.30 -0.07299
BNB price
Solana
Solana (SOL)
$166.90 -1.30298
Solana price
XRP
XRP (XRP)
$0.5194230 -0.79036
XRP price
Shiba Inu
Shiba Inu (SHIB)
$0.0000259 -7.5273
Shiba Inu price
Pepe
Pepe (PEPE)
$0.0000144 -3.05383
Pepe price
Bonk
Bonk (BONK)
$0.0000338 -8.64999
Bonk price
Bitcoin
Bitcoin (BTC)
$68,361.00 1.17598
Bitcoin price
Ethereum
Ethereum (ETH)
$3,747.43 -0.77066
Ethereum price
BNB
BNB (BNB)
$595.30 -0.07299
BNB price
Solana
Solana (SOL)
$166.90 -1.30298
Solana price
XRP
XRP (XRP)
$0.5194230 -0.79036
XRP price
Shiba Inu
Shiba Inu (SHIB)
$0.0000259 -7.5273
Shiba Inu price
Pepe
Pepe (PEPE)
$0.0000144 -3.05383
Pepe price
Bonk
Bonk (BONK)
$0.0000338 -8.64999
Bonk price
SirWin
SirWin
SirWin

The crypto market reacts as Fed hikes by 25 bps

the-crypto-market-reacts-as-fed-hikes-by-25-bps
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The crypto market reacts as Fed hikes by 25 bps

After the 25 bps rate hikes announced by the Fed on March 22, the markets, including bitcoin, crypto, and stocks, reacted negatively. 

Fed 25 bps rate hike

The Fed chair Jerome Powell, after the FOMC meeting on March 22, announced that the Fed hiked the interest rates by 25 points. The new rate hike moved the interest rates to a bracket of 4.75% to 5%. This is up 25 points from the initial 4.5% to 4.75% rate target set on Feb. 2. 

Powell reiterated a couple of times in his speech that the FED is committed to curtailing the inflation rates to their acceptable range of 2% in the coming years. However, he noted that these inflation drops will take not just months but probably till around 2025. 

The general expectation from the community was that the FOMC would increase the rates by 25 bps. Hence, the recent move didn’t get the customers in huge dismay.

Considering the inflation highs last year, Powell noted that the CPI had reduced relatively in recent months. The FOMC is committed to ensuring that inflation reduces to the 2% bracket and price stability is fully attained.

He noted that other economic builders, like the housing market, remain weak with high mortgage rates. Unemployment rates have declined.

Bitcoin and crypto react

Before the announcement, bitcoin traded in the $28,500 range and seemed poised for $30,000. 

The crypto market reacts as Fed hikes by 25 bps - 1
Bitcoin price action | Source: Coinmarketcap

However, based on charts, after Powell announced, bitcoin (BTC) dropped to about $28,000 and later to $26,700. The BTC market reacted negatively, losing about 6% in less than 2 hours.

While bitcoin is still trading in the red, it has recovered slightly and currently trades at $27,400.

While this is still a huge drop, bitcoin’s demeanor indicates a possible strong recovery. The next few hours and days are key to determining if bitcoin will surge past $30,000 as investors continue to contemplate what the Fed said.

The crypto market reacts as Fed hikes by 25 bps - 2
XRP price action | Source: Coinmarketcap

XRP looks like one of the biggest losers, having plunged over 9% since the Fed’s announcement a few hours ago. The coin is trading at $0.42, a huge decline after recording a surge of about 34% in the seven days heading into the Fed’s announcement. 

The Fed’s tone

Before the announcement, many investors noted that the Fed’s tone would be the critical determinant of market reaction. Since people expected the 25 bps hike, it would not primarily affect sellers and buyers.

The Fed’s tone at the time, however, seemed quite harsh. Despite the ongoing bank crisis, the Fed highlighted that the financial conditions have tightened, more than displayed by markets.

Many people initially anticipated that the next FOMC announcement in mid-year would cut rates after the recent rate hike. Powell noted that rate cuts are not likely to occur this year.

However, he also noted that they would make their next decision based on incoming data. The current market reaction could indicate investors lack confidence, after the rate hikes, despite ongoing recession fears.