Bitcoin Volatility Amid Fed's First Rate Hike in Over Three Years

Following the U.S. Federal Reserve's first interest rate increase in over three years, Bitcoin (BTC) fluctuated between $75,000 and $76,500 before settling around $75,600, according to The Block. Ethereum (ETH) also saw movement, trading between $2,370 and $2,430 before closing at approximately $2,376.

The Fed raised its benchmark rate by 0.25 percentage points to a range of 3.75%-4.00% in a unanimous decision at today's FOMC meeting, marking the first increase since July 2023. The move was widely anticipated, with CME FedWatch indicating a 92% probability of a 0.25-point hike prior to the announcement.

Fed Chair Kevin Warsh stated that the U.S. economy is strengthening and financial conditions are not particularly tight, noting it is difficult to describe broad financial conditions as restrictive. He added that some easing measures have been removed. The Fed also left open the possibility of further rate hikes, with 16 out of 18 policymakers projecting at least one more 0.25-point increase this year.

Overall market reaction was limited, with most top 20 cryptocurrencies trading within a 0.5% range after the decision. XRP rose about 1.5%, Solana (SOL) gained around 1%, and Zcash (ZEC) surged by 6.5%. Bitget analyst Louis Huang noted that while markets had already priced in one rate hike, the dot plot clarified potential further tightening, with energy prices and Fed policy paths expected to influence crypto markets moving forward.