Bitcoin Wavers After Fed Rate Hike, Down Nearly 4% on Week

After the Federal Reserve announced a rate hike, Bitcoin's price dipped and then stabilized within 24 hours, ending roughly flat. According to Bitcoin Magazine, the Fed raised its federal funds rate target range to between 3.75% and 4%, marking the first increase since 2023. Bitcoin fell to as low as $75,355 within an hour of the decision before rebounding to nearly $75,813. Over the past seven days, Bitcoin has declined nearly 4% cumulatively. Traders had priced in a more than 90% probability of a rate hike at the Fed's September meeting, so most Bitcoin trading occurred before Wednesday's announcement. Fed Chair Kevin Warsh stated that price stability is the Fed's top priority, adding that "inflation is too high and has persisted for too long, and this summer's inflation data does not indicate a clear improvement in underlying trends." Warsh has publicly praised Bitcoin and, in his first major speech since assuming the chairmanship last month, also stressed that inflation is too high and must be brought down. The new chair's stance contrasts with that of Trump, who has repeatedly called for rate cuts and threatened to fire the former Fed chair for not cutting rates. Trump posted on Truth Social last week, saying "We should have the lowest interest rates in the world." Bitcoin typically performs well in a low-rate environment because more liquidity is available in the market to buy the asset.