Interest rate decision: Will Crypto Continue to Rise?

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• The Federal Reserve is expected to announce a 25 basis points rate hike tomorrow, which could have an impact on the crypto markets.
• Banks have seen some relief today with First Republic Bank up 30% and UBS and Credit Suisse also seeing gains.
• If the Fed should surprise market expectations and cut rates, bitcoin and crypto could motor upwards.

Tomorrow’s Interest Rate Decision

The Federal Reserve is widely expected to announce a 25 basis points rate hike tomorrow, with the current market view being that there is a strong likelihood of this happening according to the CME FedWatch tool. This could have an important factor in whether Crypto continues its rise of the last few months.

Banks Finding Relief

Today has seen banks finding some respite from their recent struggles, with First Republic Bank up around 30% on the day so far, after a brutal sell-off over the last few days. Credit Suisse has stopped haemorrhaging for now and UBS, who bought them out, is up 8%. Treasury Secretary Janet Yellen is expected to announce today that the federal government will intervene again if any other banks start failing.

Impact of Rate Hike on Crypto Markets

Analysts suggest that yet another rate raise can’t be good for crypto as it already suffers from losing 3 major banks providing fiat on/off ramps. A 25 bp rise could cause a pullback in cryptocurrency markets but many investors are expecting a pivot from the Fed soon and this could really motor bitcoin prices upwards if they surprise market expectation by cutting rates instead.

Views Differ on Interest Rates

The opinion varies as to what should happen with interest rates; some are of the opinion that they need to be cut straight away while others feel they need to build up more percentage before doing so in order to give them enough points when it comes time for cuts.

Conclusion

It remains to be seen how crypto markets will react to tomorrow’s interest rate decision but it would certainly benefit from any surprise cuts announced by the Federal Reserve which could send bitcoin prices soaring higher than ever before!