The price of the leading cryptocurrency has dropped below $64,000. The digital asset market reacted negatively to the results of the first meeting of the Federal Reserve under Kevin Warsh's leadership.
Hourly chart of BTC/USDT on Binance. Source: TradingView.The regulator maintained the key interest rate at 3.5-3.75% per annum. Despite expectations from the crypto sector, the head of the agency hinted at the possibility of a rate hike by the end of the year.
The dot plot revealed a split in opinions: nine officials expect the rate to remain unchanged or decrease, while another nine anticipate at least one increase. Warsh declined to provide a personal assessment, calling this format "restrictive" for future policy.
The Fed chair announced the formation of five working groups. They will examine the regulator's communications, asset balance, data sources, the impact of AI on the economy, and methods to combat inflation.
During the press conference, Warsh mentioned "price stability" more than ten times. Investors interpreted his rhetoric as "hawkish." Consequently, the yield on two-year U.S. Treasury bonds rose by 14.4 basis points, while stock indices fell.
The Fed identified a spike in energy prices due to the conflict in the Middle East as the main risk to the economy. Kevin Warsh emphasized that the agency is committed to bringing inflation back to the 2% target, calling this commitment "unconditional."
Market Reaction
Bitcoin prices fell to around $63,680. Ethereum dropped by 3.15%, while Solana and XRP fell by 2.9% and 3.8%, respectively. Only TRX saw a slight increase of 0.75%.
Source: CoinMarketCap.The GMCI 30 index, which tracks the largest assets by market capitalization, lost 2.6%.
Source: TradingView.The price of gold fell by 1.39%, and silver decreased by 2.79%.
Source: Gold Price.The stock market reacted differently to the news. The S&P 500 and Nasdaq indices rose following the signing of an interim agreement with Iran and the reopening of the Strait of Hormuz.
On June 17, analysts at QCP Capital pointed out the reasons for Bitcoin's consolidation.