{"id":45892,"date":"2022-03-17T11:27:35","date_gmt":"2022-03-17T10:27:35","guid":{"rendered":"https:\/\/crypto-economy.com\/?p=45892"},"modified":"2022-03-17T11:27:35","modified_gmt":"2022-03-17T10:27:35","slug":"how-the-feds-announcement-will-affect-the-price-of-bitcoin-btc","status":"publish","type":"post","link":"https:\/\/crypto-economy.com\/how-the-feds-announcement-will-affect-the-price-of-bitcoin-btc\/","title":{"rendered":"How the FED&#8217;s Announcement Will Affect the Price of Bitcoin (BTC)?"},"content":{"rendered":"<p style=\"text-align: justify\">The <strong>US Federal Reserve (FED)<\/strong> has finally raised the <a href=\"https:\/\/crypto-economy.com\/bitcoin-risks-crashing-to-40k-the-us-fed-to-raise-interest-rates\/\" target=\"_blank\" rel=\"noopener\">much-expected<\/a> interest rates and an aggressive policy to combat inflation and it will be interesting to see how this move affects the Bitcoin (BTC) and crypto market.<\/p>\n<p><!--more--><\/p>\n<p style=\"text-align: justify\">In a <a href=\"https:\/\/www.federalreserve.gov\/mediacenter\/files\/FOMCpresconf20220316.pdf\" target=\"_blank\" rel=\"noopener\">press release<\/a> on Wednesday, March 16, the Federal Reserve\u2019s chairman Jerome Powell announced that the <strong>Federal Open Market Committee (FOMC), the Fed&#8217;s monetary policy-setting committee, had lifted policy rates by a quarter percentage point, or 25 basis points.<\/strong> This is the first interest rate increase in more than three years by the Feb to control the spiraling inflation which is currently at the highest since 1982.<\/p>\n<blockquote class=\"twitter-tweet\" data-width=\"550\" data-dnt=\"true\">\n<p lang=\"en\" dir=\"ltr\">Read Chair Powell&#39;s full opening statement from the <a href=\"https:\/\/twitter.com\/hashtag\/FOMC?src=hash&amp;ref_src=twsrc%5Etfw\" target=\"_blank\" rel=\"noopener\">#FOMC<\/a> press conference (PDF): <a href=\"https:\/\/t.co\/iaGLI9jpRP\" target=\"_blank\">https:\/\/t.co\/iaGLI9jpRP<\/a> <a href=\"https:\/\/t.co\/iVzSzGEcy9\" target=\"_blank\">pic.twitter.com\/iVzSzGEcy9<\/a><\/p>\n<p>&mdash; Federal Reserve (@federalreserve) <a href=\"https:\/\/twitter.com\/federalreserve\/status\/1504169153242050560?ref_src=twsrc%5Etfw\" target=\"_blank\" rel=\"noopener\">March 16, 2022<\/a><\/p><\/blockquote>\n<p><script async src=\"https:\/\/platform.twitter.com\/widgets.js\" charset=\"utf-8\"><\/script><\/p>\n<p style=\"text-align: justify\">According to reports, this is not the only Feb interest rate hike for 2022. FOMC, which holds two-day meetings every year to set the <strong>monetary policy<\/strong>, has hinted at a further increase at each of the six remaining meetings this year, pointing to a consensus funds rate of 1.9% by year\u2019s end. <strong>The committee sees three more hikes in 2023 then none in 2024<\/strong>.<\/p>\n<h2 style=\"text-align: justify\"><strong>How It Will Affect the Price of Bitcoin (BTC) and Cryptocurrencies?<\/strong><\/h2>\n<p><img fetchpriority=\"high\" decoding=\"async\" class=\"aligncenter size-full wp-image-45898\" src=\"https:\/\/crypto-economy.com\/wp-content\/uploads\/2022\/12\/flag-1446423_640.jpg\" alt=\"FED Bitcoin\" width=\"696\" height=\"360\" \/><\/p>\n<p style=\"text-align: justify\"><strong>These higher rates could play out on stocks, cryptocurrency, commodities, as well as many other investments over the rest of this year and into 2023<\/strong>. Bitcoin and the crypto assets will remain in everyone\u2019s eyes given the role they are playing in the current situations and their reputation as hedge against negative financial impacts..<\/p>\n<p style=\"text-align: justify\">Following the Fed announcement, <strong>Bitcoin (BTC) and Ether (ETH)<\/strong> rebounded shortly after the initial dip. <a href=\"https:\/\/coinmarketcap.com\/currencies\/bitcoin\/\" target=\"_blank\" rel=\"noopener\">BTC\/USD<\/a> pair started the day at around $40K and is now changing hands above $41,000. <a href=\"https:\/\/coinmarketcap.com\/currencies\/ethereum\/\" target=\"_blank\" rel=\"noopener\">ETH\/USD<\/a> pair is 2.67% up in the last 24-hours to trade above $2750 at the time of writing. <strong>The overall crypto market has posted small gains following the news<\/strong>.<\/p>\n<p style=\"text-align: justify\">Bitcoin and cryptocurrencies have long been touted as a hedge against inflation low-interest rates, lack of purchasing power, devaluation of the dollar, and so on. However, some analysts believe that <strong><em>crypto assets will face headwinds from these rising interest rates.<\/em><\/strong> This is evident as the crypto market plunged from its ATH times in November 2021 when the Fed first signaled higher interest rates were soon on the way.<\/p>\n<p style=\"text-align: justify\">There are mixed remarks from the industry experts. <strong>The majority of them believe that these interest hikes will bring difficult times for every market<\/strong>, crypto will remain net positive in 2022 as any short declines driven by rate hikes will be offset by greater institutional and retail active trader adoption of this asset class.<\/p>\n<p style=\"text-align: justify\"><strong>The bottom line is that BTC prices will feel the pressure of tightening monetary policy but the expected institutional involvement in the sector can offset these effects<\/strong> as they will seek higher-risk assets to meet their returns. However, with the ongoing geopolitical crises and upcoming interest rates hikes, predicting anything for the remaining part of 2022 has become impossible.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>The US Fed Federal Reserve (Fed) has finally raised the much-expected interest rates and an aggressive policy to combat inflation and it will be interesting to see how this move affects the Bitcoin (BTC) and crypto market.<\/p>\n","protected":false},"author":14,"featured_media":45899,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[100,70,74],"tags":[4610,5002,4656,5237],"_links":{"self":[{"href":"https:\/\/crypto-economy.com\/wp-json\/wp\/v2\/posts\/45892"}],"collection":[{"href":"https:\/\/crypto-economy.com\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/crypto-economy.com\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/crypto-economy.com\/wp-json\/wp\/v2\/users\/14"}],"replies":[{"embeddable":true,"href":"https:\/\/crypto-economy.com\/wp-json\/wp\/v2\/comments?post=45892"}],"version-history":[{"count":0,"href":"https:\/\/crypto-economy.com\/wp-json\/wp\/v2\/posts\/45892\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/crypto-economy.com\/wp-json\/wp\/v2\/media\/45899"}],"wp:attachment":[{"href":"https:\/\/crypto-economy.com\/wp-json\/wp\/v2\/media?parent=45892"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/crypto-economy.com\/wp-json\/wp\/v2\/categories?post=45892"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/crypto-economy.com\/wp-json\/wp\/v2\/tags?post=45892"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}