Bitcoin underwent mild correction post-Fed hike.
Following the FED’s 25 basis point rate increase, Bitcoin experienced a slight decline, dropping to $28193. By press time, the token had increased by more than 2% and was trading at $28886.
The Federal Open Market Committee of the Fed stated in a released statement along with the rate increase, “tighter credit conditions for households and businesses are likely to weigh on economic activity, hiring, and inflation,” and that it would keep close attention to inflation risks.
The decision to suspend rate rises, according to Fed Chair Jerome Powell, “was not made today,” however he highlighted the current statement did not signal more rate hikes as had previous announcements.
“The assessment of the extent to which additional policy firming may be appropriate is going to be an ongoing one, meeting by meeting,” he said, noting uncertainties in credit conditions.
“It’s possible we’ll have what I hope will be a mild recession,” Powell added.
In terms of Bitcoin, market analysts think that bank failures, not interest rates, are influencing the king coin’s price.
Victoria Bills, Chief Investment Strategist at Banrion Capital cites the ongoing banking crisis as the main factor driving up the price of cryptocurrencies and offsetting the Fed’s ongoing interest rate hikes
“As panic and market reactivity increase, perceptions of failure within the banking sector could lead to the ongoing turmoil in regional banks,” Bills said in an interview with leading media.
Bills even went on to say that market participants will keenly watch the upcoming U.S. job statistics to see how they affect the price of cryptocurrencies.
Bitcoin Transactions Established An All-Time Peak
But before then, there might be another bank failure, which raises the cost of cryptocurrencies.
Beyond macroeconomics, the use of Bitcoin has increased as a result of the introduction of Ordinals, a method of storing data on the most valuable blockchain.
BTC Transactions recently hit an all-time high at 682,281 with network fees of 23 BTC each day, or almost $656,000, as reported by TronWeekly.
The unprecedented surge is attributed to “Bitcoin Request for Comment” or BRC-20 tokens on the Ordinals protocol created by an anonymous on-chain analyst named Domo on March 8th, 2023.