Bitcoin, ether swing after unanimous quarter-point Fed rate hike as Warsh takes aim at inflation

What happened

The Federal Reserve raised interest rates by a quarter-point for the first time in over three years, causing Bitcoin and ether to swing sharply in price. This was a unanimous decision by the central bank.

Confirmed

Global impact / market context

Higher interest rates make holding riskier investments like Bitcoin and ether less attractive compared to safer options. This can lead investors to pull money out of these digital assets, potentially lowering their prices. It affects how people value cryptocurrencies.

Analyst inference

This rate hike is a major shift for financial markets, as cheap borrowed money has supported asset prices for years. Now, with higher costs, investors may reduce exposure to volatile assets. The crypto market is reacting to this changing environment.

Analyst inference

What to watch

1. The article mentions that the Fed's rate hike was unanimous, meaning all voting members agreed. This suggests a strong commitment to fighting inflation, which could lead to further rate increases in the future. Confirmed
2. Watch for further statements from Fed officials, like the one mentioned from Warsh, which may give clues about the central bank's future plans for interest rates. This could impact how Bitcoin and ether prices move. Proposed
3. Investors should observe how Bitcoin and ether prices settle in the coming days. The initial swing suggests uncertainty, and the direction they move could signal whether the market believes the Fed's actions will successfully control inflation. Analyst inference

Affected assets

• BTC — Bitcoin
• ETH — Ethereum

Evidence

• theblock.co