On Wednesday, July 27, the US Federal Reserve System (FRS) raised the key rate range 75 basis points at once to 2.25%-2.5%. The cryptocurrency market has reacted with growth.

“Recent months have seen steady employment growth and low unemployment. “Inflation remains high, reflecting supply and demand imbalances associated with the pandemic, high food and energy prices, and broad price pressures.”

The ministry noted that the war in Ukraine increased inflation and put pressure on global economic activity. The Fed plans to provide maximum employment and return inflation to 2%.

Against the backdrop of an increase in the key rate, Bitcoin rose to $22,000. Ethereum is trading at $1,500.

According to CoinMarketCap, the cryptocurrency market cap has surpassed the $1 trillion mark even though it fell below the key mark the day before. According to this indicator, it turned out that all digital assets in the top 10 are in the green zone.

In March, the Fed increased its key rate to 0.25%-0.5% for the first time since 2018. The traditional and cryptocurrency markets reacted to the decision with growth. The local rally among digital assets continued into April – bitcoin and Ethereum hitting yearly highs.

Recall that in May the Fed raised rates again. Contrary to forecasts, the regulator’s policy turned out to be softer – the indicator rose by 50 basis points. s. (A 75 basis point increase was expected).

Against the background of the news, bitcoin broke the $40,000 mark, but the price spikes turned out to be short-lived – on the same day, the price of the first cryptocurrency failed at $36,000, the start of a prolonged correction. .

In June, the Fed increased its key rate by 75 basis points for the first time since 1994. The indicator hit the 1.5-1.75% level, where bitcoin reacted with a short-term rise to $22,000 and then dropped below $18,000.

For information on how the Fed rate affects bitcoin price, read the ForkLog tutorials.

Read ForkLog bitcoin news in our Telegram – cryptocurrency news, courses and analysis.