By Marcus Sotiriou, Analyst at the UK based digital asset broker GlobalBlock
Bitcoin initially fell after the Federal Reserve’s report on their plans to hike rates for the first time since 2018 by 0.25%. However, after Jerome Powell’s press conference, in which he answered questions on the Federal Reserve’s thoughts, Bitcoin and global markets bounced back.
Global markets did not respond well initially to the report, as the Federal Reserve’s forecast for GDP growth decreased from 4% which they predicted in December to 2.8%. After being questioned on the matter, Jerome Powell responded by saying this should not be seen negatively as 2.8% is still a relatively high figure. Jerome Powell also stated that he is not concerned about a recession as the labour force is currently strong and able to withstand the coming rate hikes.
I think that the result of this FOMC meeting is bullish for the market in the short term, as the market gained clarity on the Federal Reserve raising rates by 0.25%, and there were no big surprises. However, if 0.25% rate hikes do not curb rising prices by the second half of the year, then the Federal Reserve will have to act more aggressively, therefore causing more pain for global markets and Bitcoin.
Over the past few days there have been announcements of more institutions entering the crypto space. Blockchain start-up Consensys, which was built in 2014 by Ethereum co-founder Joseph Lubin, has raised $450 million. Investors include Microsoft, SoftBank (a Japanese investment management company), and Temasek (a global investment company based in Singapore). In addition, HSBC has partnered with Sandbox, as they have purchased a plot of land in the Sandbox metaverse.