The bitcoin price has fallen from $38,000 this afternoon after the Federal Reserve (Fed) signaled more clearly that it could raise interest rates by 0.5% at its May meeting.
Bitcoin fell $1,309 or -3.28% to $38,439.
Fed Chairman Jerome Powell has signaled that the Fed will act more quickly to fight inflation and hinted at the likelihood of a 0.50% rate hike at the Fed’s May meeting.
However, investors are concerned that the Fed’s rate hike could drive liquidity out of financial markets, including the cryptocurrency market.
Bitcoin prices and the risk-weighted market have all been weighed down by expectations that the Fed will accelerate interest rates to stave off inflation. Including concerns about the impact of China’s lockdown of key cities to contain the spread of COVID-19 also puts pressure on markets,Riyad Carey, an analyst at Kaikou said .
In 2021, Bitcoin hit an all-time high like other risky assets due to the spread of COVID-19. The Fed decided to boost market liquidity by keeping its monetary policy accommodative, but now the Fed has signaled that it will tighten monetary policy. As a result, investors have to reassess their risks,Michael Novogratz, executive director of Galaxy Digital Holdings said.
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