Bitcoin Unfazed by 25bp Rate Hike as Fed Sees More Tightening

The US Federal Reserve raised its benchmark interest rate for the first time since 2023 to address persistently high inflation. 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%. Bitcoin, however, showed little immediate reaction to the announcement and remained relatively resilient.

Crypto analysts said this resilience could be tested again if the Fed raises rates further this year. During the FOMC press conference, Fed Chair Kevin Warsh said that inflation remains too high while the US economy looks to be strengthening. The Fed's updated economic projections show a majority of officials see at least one more rate hike before the end of the year.

Andrew Melville, head of research at Block Scholes, said another increase in rates would be a 'more hawkish surprise than today's 25bp hike.' 16 out of 18 FOMC participants expected another rate increase this year. Despite the Fed's decision, Bitcoin held near its pre-Fed announcement levels of around $76,000.