Bitcoin price drops as US hikes interest rates – are they connected?
Bitcoin dips as Federal Reserve chairman Jerome Powell announces interest rate hikes earlier than expected
- BTC is currently showcasing weekly profits of over 4%
- Experts are still not sure of how easy it will be easy to use BTC in El Salvador following the government's move to accept the digital asset as legal tender.
- The US Federal Reserve plans to issue 2 interest hikes by 2023
After having scaled up to a relative high of AU$53,500 over the last 72 hours, Bitcoin's upward momentum seems to have subsided a little bit, with the premier cryptocurrency currently showcasing a 2.8% decline in its value since yesterday. At press time, the worlds' largest digital asset by total market capitalization is trading at AU $51,110.
To gain a more holistic view of the industry as a whole and where Bitcoin might be headed in the future, Finder spoke with DeFi platform Harvest Finance's pseudonymous community foreman 'Red'. In his view, while the recent adoption of BTC as legal tender by El Salvador President Naib Bukele is a "great news headline", there are a number of technical aspects related to the move that are still not entirely clear, adding:
"The devil is in the details. What frameworks will they be using? How easy will access and use be for the everyday citizen? Ultimately I ask - is this more of headline fodder than real adoption for every use? Time will tell"
Also, it should be pointed out that as a result of yesterday's bearish market action, Bitcoin has proceeded to dip and fall close to a key support level, especially as Jerome Powell, chairman of the United States Federal Reserve, announced the central banking authority's decision to move forward its plan for 2 interest rate hikes in 2023.
Following the announcement, Bitcoin as well as the altcoin market at large proceeded to showcase a small amount of volatility, with the total market cap of the industry falling from AU $2.25 trillion to around AU $2.19 trillion. Not only that, even the Dow and S&P 500 experienced monetary pullbacks — of 0.77% and 0.54% respectively.
SEC's verdict regarding VanEck's Bitcoin ETF still up in the air
The U.S. Securities and Exchange Commission (SEC) issued a statement yesterday, allowing anyone from the public domain to provide their comments/views regarding the proposed rule changes surrounding asset manager VanEck's Bitcoin exchange-traded fund application that was submitted week.
As of Wednesday, a spokesperson for the regulatory body stated that the SEC had yet to arrive at a decision as to whether it was going to approve or disapprove of VanEck's BTC ETF. However, as things stand, the commission is open to the idea of asking the public whether they believe VanEck's above-stated offering could potentially be manipulated or be susceptible to other forms of financial fraud.
Public suggestions will be welcome for a total of 21 days following which they will be published in the Federal Register, and 35 days after publication in the same register for rebuttals. Lastly, it bears highlighting that to date, no Bitcoin ETF has ever seen the light of day in the United States, even though a number of applications from major players (such as Valkyrie Digital Assets and Fidelity Investments) have been submitted with the SEC.
Disclosure: The author owns a range of cryptocurrencies at the time of writing