The US Federal Reserve’s decision to raise interest rates by 75 basis points, the largest increase in 28-years, has helped Bitcoin’s price pick up slight. This has brought some relief to the broader crypto market as altcoins posted significant gains.
At the time of writing this article, Bitcoin was trading at $22,338. It has been up by 3.20% in the last 24-hours as per data from CoinMarketCap. Ethereum gained 2.36% and is changing hands at $1,212. In the early hours of June 15, the wider crypto market was under pressure. Rumors of Three Arrows Capital (3AC) potential collapse shook investors who are still trying to come to terms with Celsius pausing withdrawals.
After the Federal Reserve’s announcement, BTC rallied to $22,520. But cryptocurrencies prices have remained relatively flat. Josh Olszewicz, the head of research at Valkyrie, says markets loathe uncertainty and unpredictability. He highlighted that in recent months, digital assets have significantly correlated with the US financial markets. And both markets have been hit drastically by rising inflation and Russo-Ukraine war. Olszewicz believes a drop in downward volatility will likely be achieved with reversal of the current Fed policy and direction.
Edward Moya, a senior market analyst at Oanda, says confidence in cryptos remains low. Traders have raised concerns about the possibility of Tether seeing the same fate as Terra’s stablecoin UST. Moys said institutional crypto investors are very much down and worried that this part of the crypto ecosystem could collapse as well.