The crypto market is soaring Thursday, led by Bitcoin BTC/USD and Ethereuem ETH/USD, after the Federal Reserve raised the target fed funds rate by 0.75% Wednesday afternoon.
The Fed hiked rates by 0.75%, bringing its target fed funds rate up to a range of 2.25% to 2.5%.
The bond market had been pricing in a 50% chance that the Fed would raise rates by 1%, as reported by Benzinga earlier in July. The 0.75% hike is easing concerns surrounding the potential for a more aggressive 1% hike in order to further curb inflation.
Many view Bitcoin as a speculative inflation hedge because of its fixed supply. A more aggressive anti-inflationary decision by the Fed could have reduced the demand for inflationary hedge assets.
Related Link: Experts React To 0.75% Fed Rate Hike: ‘Don’t Think They Will Pause’
$BTC, $ETH Price Action: Bitcoin, the world’s largest cryptocurrency, has been trending lower since the start of the year amid weakness in broader risk assets, but the crypto has staged a recovery in recent weeks. Ethereum has been outperforming since developers announced a date for the crypto’s upcoming software update last week.
At press time, Bitcoin was up 8.16% at $23,801 and Ethereum was up 10.86% at $1,718.67 over a 24-hour period.
Photo: QuinceCreative from Pixabay.