Bitcoin Price Rises After Fed Announces Interest Rate Increase

Bitcoin price goes up. (Unsplash)

JAKARTA – The decline in the crypto market in recent months has shaken the crypto industry in general. Even so, the price of Bitcoin rose after the announcement regarding the interest rate hike from the Fed.

Bitcoin surged after the recent Federal Open Market Committee (FOMC) meeting. In the last 24 hours the price of BTC rose 7 percent according to Coingecko data.

This increase is the crypto market's response to the US central bank's decision to raise another 75 basis points to its policy rate. Even so, the price of Bitcoin often fluctuates in response to the results of the FOMC meeting throughout the year.

Shortly after the announcement of the interest rate hike, the price of Bitcoin soared from the price of 21,000 US dollars (equivalent to Rp. 314 million) to 22,767 US dollars (or around Rp. 340 million) per coin. At the time of writing the price of Bitcoin is trading at the level of 21,372 US dollars per coin, or around Rp. 349 million. The rise of Bitcoin triggers the rise of other cryptocurrencies including Ethereum, BNB, Cardano, Ripple, and so on.

Not only cryptocurrencies are affected, but also the stock market. Bitcoin has been correlated with the stock market in the influence of US central bank policy. The S&P is up 1.2 percent and the NASDAQ is up 2.5 percent on the day.

However, the market is starting to worry that a 100 basis point increase will soon follow at the beginning of next month. The Fed's attempt to raise interest rates is to stem the inflation that hit the US dollar this year.

According to the Consumer Price Index (CPI) report in June, inflation was recorded at 9.1 percent. This is a record high in the last 40 years, also well above the Fed's 2 percent target.

On the other hand, not a few are worried that the Fed's decision could plunge the US economy into a recession. As is known, various crypto companies such as Coinbase, Robinhood, FTX, BlockFi and others have announced mass layoffs this June.

It doesn't stop there, a number of startups in various countries have also decided to downsize employees like Shopee, Netflix, BlueStacks, Shopify, and others. The downsizing of employees does not only occur in foreign companies but also in domestic companies such as what has been done by Zenius, Pahamify, and others.