© Reuters. Bitcoin (BTC) Rises Over 8% as Central Bank Rates Rise
Bitcoin (BTC) rose 8.53% to $20,811 in the past 24 hours, the most seen in more than a month, as markets reacted positively to a record rate hike by the Bank European Central Bank (ECB) and Federal Reserve Bank (Fed) Chairman Jerome Powell’s wish for a rate hike, peaking so far on Friday, September 9, 2022.
On Thursday, September 8, 2022, the ECB announced an interest rate hike of 75 basis points, bringing its benchmark deposit rate to 0.75%. Following the news, BTC managed to break above the $20,000 resistance level to trade at $20,728 at the time of writing. In the aftermath, the price of (ETH) also rose, reaching $1,696.6, and is expected to rise further to reach $1,700.
One of the reasons for fluctuations in the value of BTC is uncertainty about central banks’ willingness to raise interest rates in the face of a deteriorating global economy.
CNBC reports that the ECB has also revised its inflation expectations, putting them at an average of 8.1% in 2022 and saying it expects another rate hike because “inflation remains far too high and should remain above the lens for an extended period. ”
Meanwhile, the US central bank (Fed) has pledged to raise rates to fight inflation. In his public address, Federal Reserve Bank President Jerome Powell said, “History strongly cautions against premature policy easing. I can assure you that my colleagues and I are strongly committed to this project and we will continue until the job is done.
Asian and American stock markets in the green
A pledge to fight inflation by two of the world’s major central banks also drove stock markets higher.
Asian stocks like the rose about 2.5%, while gains 2.1%. Dow Jones closed nearly 200 points higher, while the S&P 500 added 0.7% to its books.
Reports from market watchers also suggest that another 75 basis point rate hike could be expected from the US Federal Reserve later this month as it remains committed to tightening financial conditions in the economy.
Fed Vice Chair Lael Brainard recently issued a statement in which she noted that profit margins in several industries remain healthy after last year’s boom, and that companies seem willing to accept higher margins. weak due to negative consumer reactions to rising prices.
on the reverse
- is still down nearly 70% from its all-time high price of $69,044.
Why You Should Care
Interest rate hikes imposed by central banks traditionally provoke market reactions and increase volatility.
Bitcoin (BTC) falls to its lowest point in two months, plunging below $19,000
Over 65% of total Bitcoin (BTC) supply has been idle for a year