Following the US Federal Reserve's 25 basis point increase in interest rates, Bitcoin's price surged above $24.000.
After five months in the middle of crypto winter, the price of Bitcoin (BTC) has risen back to the level of $24.000 per unit.
The market-leading cryptocurrency appreciated after the announcement made by the United States Federal Reserve (FED) to raise interest rates by 25 basis points, as planned since December.
The Fed has maintained a restrictive monetary policy to control inflation levels, and in previous months it had been announcing interest rate increases of between 50 and 75 basis points. However, the latest increase announced, of 25 basis points, seems to represent a change of tone for its aggressive monetary policy.
Analysts expect a more relaxed stance from the Fed this year.
Federal Reserve Chairman Jerome Powell has indicated that the government agency will continue to raise interest rates. However, Powell also specified that despite the current inflation problems, it seems that interest rate increases will be more moderate, settling at a pace of 25 basis points for the future.
With the recent increase in the Fed's interest rates, the US central bank's target range stands at 4,75%, touching a 15-year high.
It may interest you: What has happened in 2022 in the crypto world?
The European Central Bank also raises interest rates
Following in the footsteps of the Fed, the European Central Bank, the monetary authority of the member countries of the European Union, also announced a new increase of 50 basis points in its interest rates. Christine Lagarde, president of the ECB, said that the central bank plans to announce a new increase next month.
The Bank of England (BoE) also announced a new increase in its interest rates by 50 basis points.
Bitcoin price rises
The recent monetary policies announced by the FED led Bitcoin to touch its best level in the last five months.
Bitcoin price rose to $24.167 per BTC on Thursday, hours after the FED announcement. At the time of writing, the cryptocurrency's price has corrected by 2,7% and is trading near $23.500, according to data from CoinMarketCap.
Source: CoinMarketCap
Trading activity and total cryptocurrency capitalization also saw a surge a day after the Federal Reserve announcements. Currently, the market value of all cryptocurrencies is $1,08 billion dollars, growing 6% since yesterday.
Bitcoin's brief surge above $24.000, according to Bloomberg analysts, was fueled by investor optimism about a more relaxed Fed stance and the possibility that interest rate hikes are coming to an end, in what the agency would call a disinflationary process.
On the increase of the FED, Blockchain Summit Latam he highlighted that the actions of the Federal Reserve have a greater impact on the cryptocurrency market than on traditional markets. Other cryptocurrencies in the market, as well as fiat currencies and stocks on Wall Street, the S&P 500 and Nasdaq, also appreciated following the announcements made by the FED.
Continue reading: The cryptocurrency regulations that set a precedent in the United States Congress
