Fed Hike Brings Muted Crypto Reaction as Market Eyes Further Hurdles

The Federal Reserve raised interest rates for the first time since July 2023, hiking them by 25 basis points to 3.75%-4.00%, citing elevated inflation and resilient economic activity.

This decision was widely anticipated, but the reaction in the crypto market was relatively muted, with $BTC holding steady near $75,700 despite expectations of a major liquidation event.

The Fed's move is seen as a signal that much of the hike was already priced in by investors, indicating a certain level of resilience in the crypto market. However, further hikes, a rising dollar, and Treasury yields around 5% remain serious headwinds for $BTC, $ETH, $XRP, and altcoins.

Institutional investors appeared to reduce their exposure to Ethereum before the Fed's decision, with net outflows of $142.3M in the latest completed US session, including $98M from BlackRock's ETHA ETF.