[Bitcoin Now] Weakness Amid Fed Rate Hike and Quantitative Tightening Signals

[Image source=Yonhap News]

[Asia Economy Reporter Lee Jung-yoon] The U.S. Federal Reserve (Fed) has hinted at the possibility of raising the benchmark interest rate and implementing quantitative tightening (QT), causing the price of the leading cryptocurrency Bitcoin to show a downward trend.

According to the global cryptocurrency market tracking site CoinMarketCap, as of 11:48 a.m. on the 7th, the price of Bitcoin was $43,323 (approximately 52.78 million KRW), down 4.41% compared to the previous day.

Bitcoin prices weakened on the 6th (local time) after the Fed announced a big step of raising the benchmark interest rate by 0.5 percentage points at once and signaled quantitative tightening. According to the minutes of the March Federal Open Market Committee (FOMC) meeting released by the Fed, the attendees generally agreed to reduce the Fed's holdings of Treasury bonds by $60 billion and mortgage-backed securities (MBS) by $35 billion each month. Many FOMC participants mentioned that "if inflationary pressures rise or strengthen, it may be appropriate to raise the benchmark interest rate by 0.5 percentage points or more at future meetings."

Bloomberg reported, "Expectations that the U.S. benchmark interest rate will rise the most in 30 years have reduced demand for risk assets, causing Bitcoin prices to fall for the fourth consecutive day." Scott Freeman, co-founder of JST Capital, said, "Global uncertainty is hitting Bitcoin prices," adding, "It is very difficult to predict Bitcoin's current movements." He also said, "Investors are unwilling to take risks due to macroeconomic factors."

Meanwhile, Dunamu's Digital Asset Fear & Greed Index recorded 50.38, indicating a 'neutral' stage. Compared to 60.68 (greed) on the 31st of last month, a week ago, it fell by 10.31 points. Dunamu's Digital Asset Fear & Greed Index is divided into stages of 'Extreme Fear (0?20)', 'Fear (20?40)', 'Neutral (40?60)', 'Greed (60?80)', and 'Extreme Greed (80?100)'. The greed direction indicates increased interest in buying among market participants, while moving toward fear indicates a fear of asset decline, leading to market exits and a chain reaction of price drops.

This content was produced with the assistance of AI translation services.