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The Bitcoin price fell from $37,000 this morning on fears that the U.S. Federal Reserve (Fed) may raise interest rates by 0.75% at its June meeting. However, Fed Chairman Jerome Powell signaled that the Fed has not yet considered a 0.75% rate hike.
At 8 a.m. ET, the Bitcoin price fell 8.33% to $36,358.01.
Bitcoin prices fell, as did other risk-weighted assets, including equities, after CME Group’s FedWatch tool indicated investors now put a 75% probability on the Fed raising rates by 0.75% at its 14-day meeting on June 15, up from 19% last month.
The Fed’s interest rate hikes could drive liquidity out of financial markets, including the cryptocurrency market.
Analysts from many offices, including Michael Novogratz, managing director of Galaxy Digital Holdings, said that the Fed has started to tighten its monetary policy by raising interest rates. This caused investors in the cryptocurrency market to re-evaluate their risks after Bitcoin, like any other risky asset class, reached a record high in 2021 due to the loose monetary policies of central banks.
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Friday, May 6, 2022