News

Why the Fed’s Interest Rate Hike Mightn’t Be Such a Bad Thing for Crypto?

In an effort to keep inflation under control crypto, the Federal Reserve of the United States (Fed) raised interest rates for the first time since 2008. The U.S. central bank announced that it was lifting its benchmark rate by 0.25 percentage points.

Why the Fed’s Interest Rate Hike Mightn’t Be Such a Bad Thing for Crypto?

The market appears to have taken the news in stride; bitcoin’s price plummeted by approximately 3% in the immediate aftermath of the news, but rapidly recovered and is now trading at $41k.

The conflict in Ukraine is producing a slew of economic issues, ranging from more immigration to higher commodity costs such as food and oil, as well as faster worldwide inflation. In a news release, the Fed stated, “The [Ukraine] invasion and related events are anticipated to exert significant upward pressure on inflation and impact on economic activity.”

“This is a predicted rate hike, but given 7.9% inflation and a 0.25 percent hike, it does little to alleviate the profoundly net negative real rates, and we will continue to see the dollar lose value to more and more people,” said George Harrap, co-founder of Step Finance.

The increase in interest rates, on the other hand, may not be bad news for crypto in the long run.

As interest rates climb, crypto stays resilient

“We believe bitcoin and digital assets will be resilient in an environment where interest rates are rising. “We’re also seeing less ambiguity around geopolitical risk,” Eaglebrook advisers’ director of research Joseph Orsini told CNBC.

According to Michael Safai of Dexterity Capital, “the market’s modest response to consecutive rate hikes would signal that the Federal Reserve’s decision isn’t proving to be the key driver of crypto right now.” “Investors are still wary, as evidenced by derivatives market activity.”

Join CoinCu Telegram to keep track of news: https://t.me/coincunews

Follow CoinCu Youtube Channel | Follow CoinCu Facebook page

Annie

CoinCu News

Annie

Championing positive change through finance, I've dedicated over eight years to sustainability and environmental journalism. My passion lies in uncovering companies that make a real difference in the world and guiding investors towards them. My expertise lies in navigating the world of sustainable investing, analyzing ESG (Environmental, Social, and Governance) criteria, and exploring the exciting field of impact investing. "Invest in a better future," I often say. That's the driving force behind my work at Coincu – to empower readers with knowledge and insights to make investment decisions that create a positive impact.

Recent Posts

Bitcoin Spot ETF Inflows Reach $449M With BlackRock Leading

Key Points: Bitcoin Spot ETF Inflows totaled $449M, led by BlackRock’s $1.45B contribution. Ethereum Spot…

3 minutes ago

Best New Meme Coins to Join for 2025: BTFD Coin Leads, Popcat Keeps It Purr-fect, and Non-Playable Coin Hits Gamers Hard

Discover the Best New Meme Coins to Join for 2025. BTFD Coin's price rollback offers…

1 hour ago

Solana memecoins crash while DTX Exchange hits 100,000 TPS on layer-1 blockchain

Discover how DTX Exchange's historic achievement of 100,000 transactions per second on a layer-1 blockchain…

2 hours ago

Strategic Bitcoin Reserve Expected to Cut 35% of US National Debt by 2049

VanEck suggests the U.S. could reduce its national debt by 35% by 2050 through a…

2 hours ago

The New Lead of Presidential Crypto Council Appointed by Trump Is Bo Hines

President-elect Donald Trump named Bo Hines as the executive director of the presidential crypto council.

3 hours ago

Best New Meme Coins with 1000X Potential: BTFD Coin’s Hot BIG50 Discount As Baby Doge Coin, Dogs Takes Gaming to the Next Level

Explore the best new meme coins with 1000X potential. Learn how BTFD Coin leads with…

4 hours ago

This website uses cookies.