Major cryptocurrencies fell on Wednesday, after the Federal Reserve kept interest rates unchanged at the end of its two-day June meeting, but senior officials suggested another 50 basis points of rate hikes remain on the table, if inflation doesn’t slow faster.
Bitcoin
BTCUSD,
dropped 3% over the past 24 hours to around $25,068 on Wednesday, according to CoinDesk data. The cryptocurrency gained more than 56% so far this year, but is still down more than 60% from its peak in 2021.
Ether
ETHUSD,
tumbled 5.3% over the past 24 hours to about $1,646 on Wednesday.
Fed Chairman Jerome Powell said in a press conference Wednesday that a key measure of inflation remains sticky, and the Fed might need to raise rates a few more times before reaching peak rates.
The central bank’s “dot plot” forecast also pointed to the possibility of the Fed hiking again this year, as it shows the benchmark rising to a range of 5.5% and 5.75%. The Fed’s prior projected terminal rate was the current range of 5%-5.25%.
Still, Michael Safai, partner and co-founder at Dexterity Capital, said crypto’s decline Wednesday has little to do with Fed’s meeting, and could be attributed more to thinner liquidity and a weak sentiment.
“Crypto tracked in line with stocks after the Fed press release and conference, and there weren’t any surprises. Given how thin trading volumes are at the moment, a sizable (but not massive) sell order is enough to set off liquidations,” Safai wrote in emailed comments.
U.S. stocks closed mixed on Wednesday, with the Dow Jones Industrial Average
DJIA,
down 232 points, or 0.7%, while the S&P 500
SPX,
and the Nasdaq Composite
COMP,
gained 0.1% and 0.4%, respectively, according to FactSet data.
Meanwhile, crypto traders are “more inclined to keep their money off the table” as U.S. regulators continue to increase oversight on the industry, often through lawsuits, noted Safai.
This story originally appeared on Marketwatch
