- Bitcoin and Ethereum moved lower following hints the Fed will increase interest rates next month.
- Dogecoin, Shiba Inu, and other dog-themed memecoins dipped on Thursday.
Happy Thursday!
Crypto markets traded lower overnight and into Thursday following the release of the US Federal Reserve’s latest meeting minutes. The central bank’s policy-setting committee, the Federal Open Markets Committee, signalled more hikes could be required to curtail inflation.
Let’s dig in!
Fed minutes
The meeting minutes from the FOMC’s July 25 and 26 meeting were released on Wednesday.
The minutes provide a clearer picture of the central bank’s decision-making process around interest rates, while also shedding light on the committee’s outlook.
“Most participants continued to see significant upside risks to inflation, which could require further tightening of monetary policy,” the minutes read.
While a “couple of participants” on the 12-member committee indicated they favoured pausing rate hikes, ultimately the central bank increased rates by 25 basis points.
Increasing interest rates generally have an inverse relationship with stocks and risk assets. Bitcoin is sometimes correlated with stocks and is considered a risk asset, therefore higher rates for longer pose a headwind.
Interest rate cuts from the Fed may prove to be a catalyst for Bitcoin, Adam Guren, chief investment officer at hedge fund Hunting Hill Capital, told DL News last week.
Crypto market movers
- Bitcoin dipped 2.2% over the past 24 hours, and is trading around $28,500.
- Ethereum fell below $1,800 for the first time since June, down 1.8%.
- Dog-themed memecoins dropped across the board, with Shiba Inu leading the decline. The memecoin fell 8.1% in the past day. The drop follows the launch of Shibarium, Shiba Inu’s layer 2 – which ground to a halt just hours after going live, trapping $2.5 million on the network.
- Layer 1 blockchain Sei’s coin fell 27% to $0.18 following its token launch and airdrop. The airdrop was met with backlash after the foundation received 3% of the airdrop.
What we’re reading
- Aave stablecoin GHO struggles to hold dollar peg. ‘The focus on peg should come later,’ founder says – DL News
- Unibot makes changes to thwart private key thieves in $300m Telegram bot market – DL News
