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Home » News » Bitcoin Price Prediction – Fed Fails to Propel BTC Past $30k to Confirm End of Crypto Winter

Bitcoin Price Prediction – Fed Fails to Propel BTC Past $30k to Confirm End of Crypto Winter

Bitcoin, the world’s largest cryptocurrency, has been gaining popularity and has climbed significantly over the past few days, thanks to the difficulties faced by traditional banks and financial institutions, leading people to lose trust in them.

As a result, cryptocurrencies are becoming more popular among those looking for alternative investment options. Bitcoin (BTC) has temporarily paused its upward rally and is trading within a narrow range of around 28,000 marks. This is because the Federal Reserve raised interest rates by 0.25%, which might have a mixed impact on Bitcoin (BTC).

It is worth mentioning that investors may see this rate hike as a sign of a strengthening US economy, which might boost confidence in Bitcoin and other cryptocurrencies as alternative investments.

On the other hand, the higher interest rates may make traditional assets, such as bonds and equities, more appealing in comparison to Bitcoin, which does not give a yield.

In addition, the rise in interest rates could lead to tighter lending conditions and hinder economic growth, which may result in decreased demand for Bitcoin. Ultimately, the effect of the Federal Reserve’s interest rate increase on Bitcoin is likely to be influenced by how investors interpret the decision and the broader economic implications of the move.

Bitcoin Price

The current price of Bitcoin is $28,000 with a 24-hour trading volume of $28.5 billion. In the last 24 hours, Bitcoin has decreased by nearly 0.30%. It remains the market leader, with a live market capitalization of $541.5 billion.

Fed Raises Interest Rates to Fight Inflation, Impacts Bitcoin

The US Federal Reserve raised its benchmark interest rate by 0.25%, putting it in a range of 4.75% to 5%. The decision is intended to keep inflation under control, which remains over the 2% target.

The Federal Reserve has also reaffirmed its prediction for one more rise this year, with a high rate of 5.1% expected in 2023. This might lead to tighter financial conditions and slower economic development, and it has already had an impact on Bitcoin.

Consequently, the cryptocurrency’s value dropped after the Fed’s announcement, as higher interest rates make other investments more attractive and reduce demand for risky assets like Bitcoin.

It is also worth mentioning that Federal Reserve has increased its inflation forecast for the next few years, which means the value of the US dollar may decrease. This could lead investors to look for alternative assets to protect their wealth, such as Bitcoin.

BTC’s Surge Creates Positive Environment for Miners, Boosting Profitability

Based on data from Glassnode, the recent surge in BTC’s price has created a favorable climate for miners, resulting in increased profitability. The decline in transaction costs for miners and the rise in network activity have contributed to this profitability, with mining pools like Foundry USA and Antpool responsible for a significant portion of the BTC produced.

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