Bitcoin fell before rebounding in response to the Federal Reserve’s recent interest rate hike, following the lead of equities. On Wednesday, Bitcoin’s price was once again put to the test, falling near $20,000 per coin before rebounding to roughly $22,000 after the Federal Reserve declared it would keep raising interest rates.
The Federal Reserve raised interest rates by 0.75 percent on Wednesday, the largest increase in 28 years. The central bank went on to say that it wouldn’t stop there and that there will be more increases later this year.
Bitcoin, the most valuable cryptocurrency by market capitalization, fell to $20,392 on Wednesday afternoon Eastern Time as a result of this. It has now recovered, and according to CoinMarketCap, it was trading at $21,559.63 at the time of writing.
Over the last few weeks, Bitcoin and the broader cryptocurrency market have taken a beating as investors sell riskier assets to diversify their portfolios.
The digital asset market has historically been highly connected with stocks. Bitcoin performed what it has been doing for the most of this year—following the stock market: the S&P500 and Dow Jones Industrial Average both dipped on the news before recovering.
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