Crypto prices plunge after FED hikes rates by 75 bps.
Inflation Rate Hike
Recently on Wednesday, the Federal Reserve announced it has raised interest rates by 75 basis points, making it the third consecutive 0.75% hike this year.
The FED is raising interest rates by another 0.75%, which the market had largely anticipated.
Powell said "the chances of a soft landing are likely to diminish" – translation pain is coming!
— Lark Davis (@TheCryptoLark) September 21, 2022
Last week, the crypto market also took quite the hit after inflation reports were released showcasing the relatively high CPI of 8.3% in August. This, along with the 75 bps hike rate has caused some bearishness among investors in the community as inflation still doesn’t seem to show signs of slowing down.
Crypto Prices Sink
Within the past 24 hours, multiple cryptocurrencies from Bitcoin and Ethereum to other altcoins first saw a small spike in their price briefly after the FED’s rate hike news was announced before it began to drop again.
The rise in price was caused by brief bullishness at the prospect that the FED’s rate hike was only raised by 75 basis points like expected, rather than the potential 100 basis points that many in the community argued could have also been possible.
Despite this brief rise however, bearishness over the crypto market came back and many cryptocurrencies saw their prices drop again.
Bitcoin, which only less than a month ago was trading at a price of around $22,000 has since fallen by quite a bit, dropping to around $19,000 and even going below to briefly touch a price of $18,800 after the FED’s announcement on Wednesday, before rising again. Now, BTC is currently trading at a price of $19,100.
Ethereum on the other hand, despite having just had its massive Merge to Proof-of-Stake, hasn’t seen much surprise in its price. ETH had also fallen by more than 5% the past 24 hours since the FED’s rate hike, and now is currently trading at a price of around $1,200.
Other altcoins like Solana, Dogecoin, Polygon, and more, have also seen a drop in their price within the past 24 hours as a result of the rate hike.