- Bitcoin has dipped by more than 2.5% while the market awaits the Fed’s significant monetary policy decisions.
- Other leading cryptocurrencies like Ether, Solana, and XRP have also shown notable declines.
- The Fed is expected to keep its 23-year high interest rate of 5.25%—5.50% unchanged during the upcoming FOMC meeting.
The leading cryptocurrency dropped to a one-week low ahead of the U.S. inflation data release and the Federal Reserve’s interest rate decision. With rates already at a 23-year high of 5.25%-5.50%, experts anticipate the Fed will maintain its tight monetary policy following this week’s Federal Open Market Committee (FOMC) meeting.
Bitcoin fell more than 2.5% to its lowest price in a week before partially recovering to $68,403, down 1.86% in 24 hours. Despite a slight weekly dip of 1.40%, Bitcoin remains up over 12% in the past month. The token’s 24-hour trading volume surged 81% to $25 billion, indicating increased market activity.
Other leading cryptocurrencies, such as Ether, XRP, and Solana, have also experienced notable declines amidst anticipations of the Fed’s tightened monetary policy. While Ether at $3,576 dipped by 2.91%, XRP at $0.488 and Solana at $155 showed declines of 2.55% and 2.49%, respectively, in a day.
While the volatile crypto market is dependent on multiple factors, including economic conditions, cryptocurrencies can face major changes within seconds. As per Paradigm co-founder Anand Gomes:
“No news is bad news in crypto. The market is like a junkie that constantly needs bullish news to stay up. So when there is none, the path of least resistance is lower.”
In a recent report, Coinbase’s former chief technology officer, Balaji Srinivasan, criticized the Fed’s monetary policy, asserting that the Fed’s funds are “poor predictors of monetary policy paths.” Contrasting the Fed’s unpredictable policy with Bitcoin’s consistent monetary policy, Srinivasan stated, “If you made the graph of Bitcoin’s predicted issuance versus its actual issuance over the last 15 years, they would be exactly superimposed.”
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