Bitcoin Slides Below $27K; FOMC Targets Inflation
By Laxmikant Khanvilkar
Cryptocurrencies were knocked down in the last 24 hours after Federal Reserve Open Market Committee or FOMC – the U.S. interest rate setting committee – chose to target inflation over economic growth by announcing 25 basis points hike in interest rate.
The decision sent Bitcoin, Ethereum, other crypto projects prices lower.
Bitcoin (BTC) sank below $27,000 mark. BTC, the largest cryptocurrency by market value, was recently trading at about $27,030, down 4.1% over the past 24 hours. Ether (ETH), the second-largest cryptocurrency by market value, was recently hovering around the $1,740 level, down 3.1%.
The BTC/U.S. dollar trading pair plunging as low as $26,815 at one point on the Coinbase exchange.
Earlier Wednesday, BTC’s price rose as high as $28,815, reaching its highest level since June 10 because some investors hoped the Fed would end its year-long diet of hawkish interest rate increases because of the recent bank failures. But the Fed dashed those hopes.
The global crypto market capitalization stands at $1.15 tn, having declined by 2.77% in the past 24 hours. The total crypto market volume in that period is $69.26 bn, representing a 2.68% rise. DeFi volume accounts for $6.24 bn, equivalent to 9.00% of the total crypto market 24-hour volume. Stablecoins make up for $63.44 bn, representing 91.59% of the total crypto market 24-hour volume. Bitcoin’s dominance has risen by 0.09%, now standing at 46.11%.
Despite of the post Fed rate hike carnage, analysts hold positive outlook on Bitcoin. They believe that the Bitcoin, straddling between being the leading risk-on asset and a financial lifeboat in the event of an all-out banking crisis, has benefited from the recent turmoil and now the prospect that the Fed’s tightening could be over.
Well, on the other hand, the Fed remains steadfast on its fight against the inflation. The FOMC is “strongly committed to returning inflation to our 2% objective,” Fed Chair Jerome Powell said following the rate increase announcement.
Meanwhile, the cryptocurrencies continues to face the ire from regulatory authorities. In the latest move the U.S. Securities Exchange Commission (SEC) has warned Coinbase of perusing an enforcement action against the exchange and its staking services. In other news, Tron founder Justin Sun was sued on market manipulation changes.
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