The price of Bitcoin has just experienced significant volatility after the U.S. Federal Reserve (Fed) decided to maintain interest rates instead of continuing cuts as some investors had expected.
Fed Pauses Interest Rate Cuts – Bitcoin Soars and Plummets
On Wednesday, #Fed announced to keep the interest rate at 4.25% - 4.50%, unchanged from before. This decision caused Bitcoin to drop from $103,000 to $101,400, but shortly after it surged back to $103,800, the highest level in the last three days.
Fed Chair Jerome Powell said:
"We do not need to rush to adjust monetary policy."
The Fed had previously cut interest rates three times in a row to support the economy. However, with inflation dropping to 2.9% (from a peak of 9.1% in 2022) and a strong labor market, the Fed decided to pause its rate-cutting cycle.
Trump Applies Pressure But Does Not Affect the Fed
Former President Donald Trump recently stated he would 'request' the Fed to lower interest rates to support the economy. However, Powell affirmed he has not contacted $TRUMP and declined to comment on this statement.
Data from CME FedWatch shows that only 28% of investors believe the Fed will cut interest rates in March, down from previous forecasts.
Where Will Bitcoin Head?
Despite short-term fluctuations, Bitcoin is still hovering around the $103,000 mark. Many analysts believe that if the Fed continues to maintain or lower interest rates in the future, BTC could benefit. Conversely, if high interest rates persist, the crypto market may face additional challenges.
With uncertainty from the Fed, Bitcoin will continue to be an asset that attracts investor attention in the coming time.
