Crypto Markets Drop After Fed Leaves Rates Unchanged – Crypto News – Crypto News
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Crypto Markets Drop After Fed Leaves Rates Unchanged Crypto Markets Drop After Fed Leaves Rates Unchanged

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Crypto Markets Drop After Fed Leaves Rates Unchanged – Crypto News

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2 years ago

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After over a year of hiking rates at every meeting, the Federal Reserve left rates unchanged at a target rate of 5% to 5.25% earlier today.

Bitcoin and Ether, the largest digital assets, are trading sharply lower on the news — BTC is down over 3%, while ETH has dropped 5%.

A broad sell-off hit roughly two hours after the rate decision.

The Fed’s choice to stick with current rates came as a surprise to a few — the Chicago Mercantile Exchange’s FedWatch Toolwhich attempts to predict the Fed’s moves using Federal Funds futures prices, showed a 98% probability of a pause going into the decision.

the defiant

Two More Hikes In 2023

Notably, the central bank’s latest Summary of Economic Projections shows interest rates in 2023 peaking at 5.6%, which is above current levels. Assuming increases of 25 basis points, this suggests that Fed officials anticipate two more rate hikes in 2023.

Lower inflation will likely drive the Fed to stay its hand. The Consumer Price Index (CPI), a key proxy for inflation, has come down year-over-year since peaking in June 2022 at just over 9%. Year-over-year inflation stands at 4%, which is the lowest level since March 2021, according to data released by the Bureau of Labor Statistics on June 13.

the defiant

The Fed next convenes in late July – the FedWatch tool projects a 61% chance of a 0.25% hike at that meeting.

UNI Rallies, CRV Drops

Outside of the two largest digital assets, there has been some significant movement in DeFi tokens — UNI, the token of Uniswapthe leading decentralized exchange (DEX) by volume, has jumped nearly 3% in the past 24 hours, according to Uniswap Labs released code for a fourth iteration of the exchange on June 13.

Another major DeFi token hasn’t fared so well — CRV, which is used as a yield-booster and in governance for the popular DEX, Curve Finance, has dropped over 12%. Risk management firm Gauntlet has raised concerns about the founder’s large leveraged CRV position on Aave.

APE, the token positioned as the cornerstone of the ecosystem surrounding Bored Apes and other Yuga Labs NFTs, has also been on a downtrend — it hit an all-time low of $2.05 today, down over 90% from highs of over $26 in April 2022 .

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