- The Fed keeps interest rates stable and is criticized by analysts.
- Bitcoin price sees a decline, but BTC ETFs see inflows.
Meeting expectations and aligning with the 0.6% probability of projections CME FedWatch toolthe US Federal Reserve announced on June 12 that benchmark interest rates will remain unchanged.
After a two-day meeting of the Federal Open Market Committee (FOMC), members decided to keep interest rates at 5.25% – 5.50% for the seventh time in a row. Remarkably, this decision was also in line with Wall Street predictions.
This is responded to with a touch of criticism Anthony Pomplianosaid in a recent stream:
“It is arrogant of the central bank to believe that they can set an interest rate… the market is the real setter of interest rates.”
Following the announcement, the crypto market witnessed a significant downturn. From June 13 Bitcoin [BTC] fell 2.35% in the last 24 hours, while Ethereum was down 3.66% at the time of writing.
Only one interest rate cut by the end of 2024
FOMC members have revised their individual projections for the expected number of rate cuts this year. Initially, the FOMC in March forecast three rate cuts by the end of 2024. Now they have reduced this forecast to just one rate cut.
The revised forecast means that the FOMC now expects only one rate cut of 0.25 percentage points before the end of the year.
This announcement surprised some analysts who expected more aggressive rate cuts. Some analysts believe the Fed may need to reconsider this forecast in coming months and possibly adjust it as economic conditions change.
Amid all this, Bitcoin experienced a drop in new addresses according to AMBCrypto’s analysis of Galssnode.
Source: Glassnode
Bitcoin is strong
Despite Bitcoin’s recent bearish momentum, not all numbers point to a negative outlook. According to AMBCrypto’s analysis of Santiment data, there has been a notable spike in social dominance metrics.
Moreover, the Relative Strength Index (RSI) has not indicated any clear signs of buying or selling pressure.
Additionally, Bitcoin’s spot Exchange Traded Funds (ETFs) saw inflows of $100.8 million, marking a reversal after two straight days of outflows.
Source: Farside Investor
Pompliano said it best when he said:
“Bitcoin is the only asset that I know of that is an asset class in itself that has outperformed inflation.”