Bitcoin price fell sharply on news that the US Federal Reserve is slowing the pace of its tight monetary policy by raising interest rates by half a percentage point, international agencies reported.
The news is a clear signal to investors that the Fed will not back off its aggressive policy in 2023.
The world’s largest cryptocurrency by market capitalization reacted immediately to the announcement, dropping 2.3% to $17,940 this morning, according to CoinGecko.
Just hours earlier, the cryptocurrency surpassed $18,000 for the first time since Sam Bankman-Fried’s FTX cryptocurrency exchange crashed on Nov. 8. Bitcoin erased those gains but is still up more than 3% over the past week.
Most of the cryptocurrency market reacted in the red following the announcement, just like US stocks. Ethereum traded at $1,301, down 2.5%, and Dogecoin lost 3.5% of its value.
Digital assets closely track US stocks because they are considered “risky”: assets like tech stocks or bitcoin have more volatile prices than less risky assets like US Treasuries or the dollar.
