Bitcoin Resilient as Fed Hikes Rates for First Time Since 2023

Bitcoin held steady at around $76,000 on Wednesday despite the US Federal Reserve raising its benchmark interest rate for the first time since 2023 to combat high inflation.

The Fed's decision was expected by crypto markets, and Bitcoin showed little immediate reaction to the announcement, trading at $76,663 at the time of writing with a 1.35% increase in 24 hours.

Cooper Duschang, research analyst at Talos, said that while the price action was muted, there was movement in the spot and derivatives markets, with perpetual futures shifting towards net selling but spot demand absorbing some of the pressure.

The Fed's Federal Open Market Committee voted unanimously to raise rates by 25 basis points to a target range of 3.75% to 4%, with Chair Kevin Warsh saying that inflation remains too high and the US economy is strengthening, while 16 out of 18 FOMC participants expect another rate increase this year.

Andrew Melville, head of research at Block Scholes, noted that another rate hike would be a 'more hawkish surprise than today's 25bp hike', and Martin Lee from DWF Labs said the renewed 'hawkish stance' of higher rates would lead to risk-on assets repricing this new reality.