Bitcoin Price and Ethereum Prediction: Can the Fed Rate Hike Amid Banking Turmoil Boost BTC and ETH?
Bitcoin, the world's largest cryptocurrency, along with Ethereum, lost some of its value and dropped below $28k and $1,800 levels respectively. However, the reason could be linked to the release of a dovish statement from the US Federal Reserve regarding interest rates.
The Fed raised rates as predicted, but suggested a possible halt in its rate rise cycle in the wake of a financial collapse. But, at the same time, the central bank reaffirmed its commitment to lowering inflation, expecting at least one more rise this year and stating that it has no intention of decreasing interest rates this year.
This generated some uncertainty and volatility in the market, causing Bitcoin's price to momentarily dip.
It is worth noting that Bitcoin is used as a way to protect your wealth against inflation, so when interest rates go up, people may not want to invest in Bitcoin as much as it reduces the appeal of Bitcoin as a hedge against inflation.
Plus, higher interest rates can make it more attractive to invest in US dollars, causing people to sell their Bitcoin and other cryptocurrencies. Thus, this decision by the Federal Reserve was seen as a negative sign for Bitcoin and another cryptocurrency.
The global cryptocurrency market has been performing impressively in recent weeks. This is due to people's positive opinions on Bitcoin since they think it is a safe alternative to keeping their money after Silicon Valley Bank, as well as two other banks, Silvergate Capital and Signature Bank, collapsed.
Despite this, Bitcoin's value did not fall but gained significant traction as this has prompted some Bitcoin supporters to assume that Bitcoin is a viable alternative to established financial institutions for keeping your money safe.
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