By EWN • 26 March 2023 • 12:30
The US Federal Reserve has raised the interest rates again amid the ongoing banking crisis to tame the inflation rate. On Wednesday, the federal reserve announced another 25 basis point interest rate hike, marking the 9th consecutive rate hike since 2022. Will this decision have an impact on the crypto market? This article answers the most important question at this crucial time.
Have you ever heard of the word Inflation? This simple business term can disrupt the economy of a nation in a short period. It causes uneven price rise and reduces the purchasing power of the people, which ultimately results in recession. This will further induce an economic decline in a country, which will be reflected in the GDP. But when the inflation rate rises out of control, the countries increase their interest rates to discourage inflation by increasing the cost of borrowing.
The US Federal Reserve always prefers to maintain the Inflation rate at not more than 2%. Hence, Whenever the inflation rate increases, the federal reserve jumps in with an interest rate hike to save the country’s economy. From March 2022, the US Fed has raised interest rates from nearly zero to 5%.
The most recently released inflation rate in February fell to 6 % year on year. Although the inflation rate has registered a continuation of a downward trend, it is still higher than the US Fed’s acceptance rate of 2%. Therefore, the Fed reserve decided to curb the inflation rate further by increasing the interest rate once again. But the collapse of SVB, Signature bank, and Silvegate bank forced the Fed reserve to hike the interest rates by only a quarter point.
The crypto industry witnessed a massive raise in its market in 2021. Bitcoin, the top cryptocurrency in the market, reached $64,000 that year. Ethereum also tapped its all-time high value of $4,891 in November 2021. Almost all the prominent currencies in the crypto market enjoyed the blooming season. But a year later, the market turned upside down, and the entire crypto industry collapsed. When the US experienced the highest inflation rate in June 2022, the price of bitcoin fell to $19,000.
The rising inflation rate in the US harmed every sector of the economy. Therefore, the US Fed intervened to save the market by raising interest rates. As a result, it has raised the interest rate seven times during 2022, causing the crypto industry to decline in valuation.
The recent hike could have the same impact as last year. But the raise announced by the US Fed was lower than the 50 basis points expected. It could help the crypto industry to tackle the effects of interest rates hike. Besides, investors across the world are starting to see cryptocurrencies as a shield from the US banking crisis. This significant change in sentiment will help the crypto market thrive during this tough time.
In this time of banking crisis, protecting investments has become the top priority of investors. Dogetti can be a safe place to save your investment from the economic turmoils threatening the world.
Dogetti is a new meme-coin built on the Ethereum blockchain. The Dogetti project features Dogetti NFT, DogettiDAO, and DogettiSwap, aiming to be the one-stop solution for all the needs of crypto investors. The Dogetti ecosystem is powered by its native token called DETI, which is being sold in the presale. Dogetti has raised more than $6 lakhs in the second stage of the presale. The investors can get a 50% bonus on purchasing DETI tokens by using the DON50 family code.
As The Dogetti project is in its presale stage, it is not yet listed on any crypto exchanges. Therefore, the Dogetti market will not be influenced by any economic crisis happening in the financial sector.
Click the link below to learn more about Dogetti.
WARNING: The investment in crypto assets is not regulated, it may not be suitable for retail investors and the total amount invested could be lost
AVISO IMPORTANTE: La inversión en criptoactivos no está regulada, puede no ser adecuada para inversores minoristas y perderse la totalidad del importe invertido
Share this story
Subscribe to our Euro Weekly News alerts to get the latest stories into your inbox!
By signing up, you will create a Euro Weekly News account if you don't already have one. Review our
Download our media pack in either English or Spanish.