U.S. Federal Reserve officials raised the benchmark interest rate by 75 basis points for the fourth consecutive time, causing renewed volatility.
The price of Bitcoin (BTC) plunged to an intraday low of $20,210 on the Bitstamp exchange at 18:00 UTC before moving sharply higher and reaching a new intraday high of $20,751. Cardano (ADA), XRP, Shiba Inu (SHIB), and other leading altcoins are performing in lockstep with the flagship cryptocurrency.
The S&P 500 and other benchmark stock market indices are also experiencing high volatility.
With its most recent decision, which was taken unanimously, the Federal Open Market Committee has now moved the federal funds rate to the 3.75% to 4% range. It is worth noting that it was in a range of zero to 0.25% back in March.
A hint of dovishness?
Investors believe that the Fed will likely hike the benchmark rate by 50 basis points in December, but strong employment numbers suggest that the central bank might go for its fifth consecutive 75-basis point hike in a row. Traders see a 98.4% chance of such a scenario playing out next month, according to Fed Funds futures.
At the same time, a sentence in the latest FOMC statement indicates hints at possibly smaller increments, which might explain why crypto and stocks both rallied to intraday highs following the announcement.
As reported by U.Today, cryptocurrency mogul Mike Novogratz has repeatedly stated that crypto wouldn't be able to start another bull run without a Fed pivot.