Fed Financial News

The Bitcoin (BTC) price is hovering close to $26,000, well within its recent intra-day ranges in the lead-up to Wednesday’s key US Federal Reserve policy announcement.

Bitcoin saw a small pop this morning on weaker-than-expected weekly initial jobless claims, rising from under $26,500 to at one point above $26,800.

US labor market data for May is due on Friday the 2nd of June.

The minutes from this month’s FOMC meeting of US Federal Reserve policymakers were just released, revealing the bank to be divided on the need for further interest rate hikes.

Bitcoin (BTC) continues to consolidate within familiar ranges close to $29,000 ahead of the release of key US jobs data on Friday.

Bitcoin has recovered back above the $29,000 level, rising above its 21 and 50-Day Moving Averages in doing so, in wake of another rate hike from the US Federal Reserve.

Since 2011, Bitcoin (BTC) has posted an average return of 18.3% in May, according to data presented by bitcoinmonthlyreturn.com.

The Bitcoin (BTC) price swung wildly on Wednesday.

Despite the fact that most market participants interpreted the latest Fed policy announcement as more dovish than expected, hence the drop in the US dollar and US yields, Bitcoin markets saw a “sell the fact” reaction, with the BTC price pulling back sharply and long liquidations spiking.

Digital asset investment products saw their highest-ever weekly outflow last week, according to the latest Digital Asset Fund Flows Weekly Report released by CoinShares. The $255 million in net outflows amounted to 1.0% of total assets under management (AuM) fleeing from the space.

Bitcoin, which began trading at the US$22,000 level on Monday, dropped to its lowest point since January 2021, reaching US$19,000. Similarly, Ethereum, the second-largest cryptocurrency, also experienced a drop, falling to the US$1,300 level. As a result, both of these cryptocurrencies experienced significant losses in their weekly gains. However, following the release of the US jobs data on Friday, Bitcoin and other cryptocurrencies experienced a rebound, as the US added 311,000 jobs in February, surpassing predictions. Over the past 24 hours, both Bitcoin and Ethereum gained 3%. Investors and traders reacted to the recent statement by US Fed Chair Jerome Powell regarding potential interest rate hikes, resulting in sell-offs and increased concerns over aggressive interest rate policies. However, the decline in the crypto market may also be attributed to uncertainties surrounding Silvergate Bank broadly this week. In November, the bank faced significant withdrawals of $8.1 billion from investors following the FTX incident, leading to a chain reaction of negative consequences, including the sale of debt at a loss of $718 million. The bank's latest financial report showed staggering losses of $1 billion for Q4 and $949 million for the entire year of 2022, in contrast to the $76 million profit recorded in 2021. The bank's announcement of liquidation this week has also significantly impacted the crypto market.

More interest rate hikes are coming from the US Federal Reserve. At least, that was the takeaway from the recently released minutes of the 1st of February meeting of the Federal Open Market Committee (FOMC) earlier this Wednesday. This could be a major medium-term headwind for crypto.

Friday was a choppy, indecisive day in the Bitcoin market, with prices swinging between losses and gains of about 1.0% each way as traders digested the latest much stronger-than-expected US labor market report for last month. According to the latest figures from the US Bureau of Labor Statistics, the US economy added a whopping 517,000 jobs last month, way above the expected job gain of 190,000, while December’s figure also saw a 30,000 upwards revision to 260,000.

Cryptocurrency prices lurched higher on Wednesday in wake of more dovish than expected remarks from Fed Chairman Jerome Powell, who was speaking as usual in the post-Fed policy announcement press conference. Risk assets, including stocks, surged as Powell acknowledged that the central bank has made progress in its fight against inflation and said that the “disinflation process has started”.

Bitcoin options markets continue to signal near-term upside risks to the BTC price, despite warnings from strategists that Wednesday’s Fed meeting could trigger a “bloodbath” in cryptocurrency markets.

As the collapse of major exchange FTX continues to fuel a bearish mood throughout the cryptosphere, US Treasury Secretary Janet Yellen has called for the introduction of tighter regulations for the crypto industry.

US Fed chair Jerome Powell's vow to push interest rates to higher spooked traders. However, after dropping below $20,000, its key support and psychological level, Bitcoin flexed its muscles to rise more than 3 per cent to regain the $20,500 mark. Ethereum rose about 10 per cent to race past the $1,600 mark and recover all the weekly losses. The second-largest crypto token has been in the news over the blockchain’s ambitious software upgrade — 'The Merge.' The green days must be taken with a pinch of salt, warned Sathvik Vishwanath, Co-Founder and CEO, Unocoin. «The next couple of days are expected to be slang higher.»

— It's been a good month for bitcoin — and we haven't said that for a while. After months of freefall, it jumped more than 17% in July, its best performance since October. Ether rose 57%, its strongest monthly gain since January 2021.

Fed Chair Jerome Powell said on Friday, weighing in with generally positive remarks on a hot-button topic at the central bank that has left policymakers divided. «A U.S. CBDC (central bank digital currency) could… potentially help maintain the dollar's international standing,» Powell said in introductory remarks to a research conference held by the central bank on the international roles of the dollar. The Fed has just finished a four-month public consultation period soliciting opinions on the idea of a digital dollar. Fed Vice Chair Lael Brainard has emerged as a key supporter while Fed Governor Chris Waller has made the case against.

Bitcoin plunged to the lowest in about 18 months after the freezing of withdrawals by the Celsius lending platform added to concern that systemic risk in the crypto ecosystem will accelerate the digital-asset market meltdown. The world's largest digital token tumbled as much as 15% to $23,336 — its lowest since December 2020. Other cryptocurrencies also declined as a broader sell-off continued. The MVIS CryptoCompare Digital Assets 100 Index, which measures 100 of the top tokens, dropped as much as 15%. And the total market value, which topped $3 trillion in November, was $1.02 trillion as of 9:48 a.m. New York time on Monday, according to CoinGecko. «The fundamentals to support stabilization and recovery just aren't there,» said Steven McClurg, co-founder and CIO at crypto fund manager Valkyrie Investments. «Things can and likely will get worse before they get better.»

Bitcoin has scant experience with rising interest rates, posing perils for investors looking to capitalize on its dramatic drop. The cryptocurrency has tanked along with other risk assets such as tech stocks after the Fed amped up rates last week, sending them on a trajectory that's expected to pass 3% early next year. Bitcoin was an awkward child on the fringes of finance during the Fed's previous tightening cycle, from 2016 to 2019, and was barely correlated with stocks. The last time interest rates hit 3%, in 2008, it was but a gleam in the eye of Satoshi Nakamoto.