Crypto Market Prices Go Up After Less Aggressive Fed Rate Hike last Feb 1
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- The Federal Reserve of the United States raised the benchmark overnight lending rates by 25 basis points (0.25%) on February 1, 2023, resulting in a 5.8% increase in the crypto market capitalization.
- The performance of the top 10 tokens, including $BTC and $ETH, increased after the Fed rate hike announcement, with the biggest gain seen in MATIC at 13.89%.
- The crypto market has experienced challenges in the past, including reduced liquidity and high-profile issues, which have impacted trader confidence in virtual assets.
Days after the Federal Reserve of the United States raised the benchmark overnight lending rates by 25 basis points, or 0.25 percentage points, for February 2023, the crypto market capitalization is now up by 5.8% for the past 24 hours. Crypto prices are also on a positive trend as of this writing.
The hike brings the Fed’s target range to 4.5%-4.75%, which matched investors’ expectations and is the highest level since 2007. However, the 25 basis points set by the agency is one of the less aggressive in the past few years. The U.S. central bank raised interest rates by 75 basis points four times last year, then slowed down by raising rates by only 50 basis points.
This Fed rate hike is one of the big factors that crypto enthusiasts and investors are looking at when anticipating the market.
In fact, $BTC, from as high as $23,907.56 on January 30, went down to as low as $22,704.73, a day before the Fed rate hike is expected to be announced. $BTC was also marked at $22,883.57 hours before the announcement.
As of this writing, $BTC is at $23,826.63, about a 4.12% increase from Wednesday’s all-day low.
Meanwhile, $ETH, which peaked at $1,655.62 on January 30, went down to as low as $1,552.64 a day before the announcement. $ETH also experienced its all-day low on February 1 at $1.570.79.
As of this writing, $ETH is at $1,676.85, with a gain of about 6.75% since Wednesday.
Other coins, by market cap, that experienced a price movement since the Fed rate hike announcement:
- BNB: 6.98% increase
- XRP: 3.56% increase
- ADA: 6.80% increase
- DOGE: 1.78% increase ($DOGE rallied last Wednesday)
- MATIC: 13.89% increase
But despite this rally of tokens in the crypto market, the Fed still insisted that the Federal Open Market Committee, which determines the appropriate stance of monetary policy in the U.S., is consistently seeing the need for “ongoing increases in the target range.”
Meanwhile, in an interview with the online financial magazine Bankrate, Dan Raju, the CEO of brokerage platform Tradier, emphasized that “the future of crypto in 2023 is going to be driven by how much appetite for risk exists among the investor community.” But despite the challenges faced by the industry in the past dates, “the market does not seem to have that appetite.”
“Indeed, cryptocurrencies responded to reduced liquidity as did other risky assets, by falling when the Fed announced in November 2021 its intention to raise rates and then throughout 2022 as the Fed aggressively followed through. On top of that, high-profile blow-ups of individual cryptocurrencies and exchanges such as FTX have hammered traders’ confidence in these virtual assets,” Bankrate concluded.
This article is published on BitPinas: Crypto Market Prices Go Up After Less Aggressive Fed Rate Hike last Feb 1
Disclaimer: BitPinas articles and its external content are not financial advice. The team serves to deliver independent, unbiased news to provide information for Philippine-crypto and beyond.