Bitcoin fell below $18,000 on Fed rate hike
Yesterday, the U.S. Federal Reserve raised its key rate range by 50 basis points up to 4.25-4.5% per annum. It is worth noting that this is the highest rate since 2007.
However, this decision was not a surprise for market participants. In fact, since the beginning of the year it is already the seventh rate hike. Although, this time the Fed has slightly reduced the pace of the increase – the four previous times it was 75 basis points.
Against this backdrop, bitcoin was trading in a highly volatile environment, and its quotes fell below $18,000.
In its press release, the regulator highlighted the focus on inflation risks. Their growth is marked even taking into account a slight increase in spending and production, as well as a relatively low level of unemployment.
As for the main triggers of rising average prices, they still include supply and demand imbalances, as well as higher food and energy costs.
In the long term, the Fed has full employment and a 2% inflation target in prospect.
It is worth remembering that in early November the Fed raised the key rate range by 75 basis points – up to 3.75-4% per annum. At that time, the bitcoin price reacted with a slight decline.