cryptocurrency

Interest rate hikes in late July caused the price of Bitcoin to rise

Late July saw Bitcoin soar above $23,000 for first time in more week. The world’s number one digital currency saw a sharp rise after the Federal Reserve decided to push interest rates another 75 points.

Bitcoin price hike after price hike

This behavior is just further evidence that bitcoin is so unpredictable that, up to this point, persistent price increases have often been the main reason for the bitcoin drops we’ve seen in recent weeks. Bitcoin has been in a downtrend since November of last year. The asset was trading at a new all-time high of around $68,000 per unit about nine months ago, although since then, the coin has had trouble maintaining its $20,000 price tag, which means the asset has lost more than 70 percent. of its value and it is unclear when – or even if – things will recover.

Now, the cryptocurrency appears to be on an upward trend, with the asset surging around $3,000 in the past few days, although this jump followed the news that the Federal Reserve had once again pushed interest rates higher. This has been repeated over and over as a means to combat inflation, and is now at a level Record 9.1 percent In the United States alone. This means inflation is at a 40-year high, and food and gas prices continue to move beyond the clouds. Things haven’t been this bad before, but bitcoin seems to be jumping rather than dropping any further.

Many analysts and industry leaders have noted other Fed rate hikes that have occurred in recent weeks. Many say it was these price increases that caused bitcoin to drop in the first place. They also claim that the world’s number one digital asset failed the hedging instrument’s test, and many others claimed that it was completely vulnerable to being overrun.

As a way to combat rising prices, the Federal Reserve has pushed interest rates up consistently and each time Bitcoin has suffered somewhat, although things are a little different this time. Anthony Trenchev, co-founder of crypto wallet platform Nexo, explained in a recent interview:

The conclusion of the Fed meeting on Wednesday opens a summer window for a higher bitcoin price, given that we now have two months for policy makers to then deliberate on monetary policy. The next 24 hours will be a veritable test of bitcoin’s resilience rediscovered after it shrugged its shoulders at this month’s excellent US inflation data and was not surprised when Tesla announced that it had sold off most of its bitcoin holdings.

Other Cryptographic Incidents

For the most part, one cannot entirely blame inflation for the crash in bitcoin. There have been many incidents in the cryptocurrency space that ultimately worked against the asset.

The most recent involved the liquidation of the crypto hedge fund Three Arrows Capital.

Tags: bitcoin, fed, price hike

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