The Federal Reserve’s interest rate hikes have been one of the most talked-about topics in the crypto space.
The crypto market has always reacted negatively whenever the Fed decided to increase the interest rates. However, this time the situation appears to be different.
During yesterday’s FOMC meeting, the Federal Reserve increased the interest rates by 0.75% to curb the rising inflation rate. Now, inflation has hit 9.1%, a figure that was never seen in 40 years.
However, this time the broader crypto market has reacted positively to the increased interest rates, utterly opposite to what was earlier anticipated. Instead, Bitcoin and Ethereum have surged.
Reasons Behind The Unexpected Price Surge
The expectation from the Fed was that it would increase the interest rates by 100 points while the market was looking forward to 75bps rate hikes. Hence, it appears that the market has reacted positively as the market expectation was met. Had the rates been hiked to 100bps, the situation might have been different.
Another possible reason for the surge could be the upcoming Ethereum testnet merger.
However, traders, analysts, and experts aren’t so optimistic. A crypto trader at Blofin, Griffin Ardern, believes that the crypto market has yet to recover to a stable level and is of the opinion that Bitcoin could see a 10% drop soon.
However, the market is showing no signs of weakness till now, and market participants keep their spirits high.
Following the news, Bitcoin and Ethereum surged by 7.85% and 11.72%, respectively.
Traders who played smartly and made a purchase during the market dip have seen some reasonable gains.
Could this be the start of a notable upswing, or is a price flip just around the corner? Tell us in the comments below!