Home›Crypto›Market Structure›Bitcoin slips ahead of Fed decision as odds of a hike…

Bitcoin slips ahead of Fed decision as odds of a hike rise

Bitcoin traded down as much as 3% to $62,913, while Fed futures imply roughly a one-in-three chance of a quarter-point increase.

Reported · Written up by our desk · Market Structure

Bitcoin fell over the past 24 hours as traders positioned for an upcoming Federal Reserve decision that could depart from a long-running playbook, according to CryptoSlate data. The largest cryptocurrency dropped as much as 3% to $62,913, its lowest level in nearly two weeks, before recovering to $63,795 as of press time.

The move comes ahead of the Fed’s July policy meeting, the second meeting under Chairman Kevin Warsh. The Fed has kept its benchmark rate unchanged at 3.50% to 3.75% since December, while President Donald Trump has repeatedly urged policymakers to lower borrowing costs.

Even though many investors expect no change, futures markets were assigning about a one-in-three probability to a quarter-point increase. Bank of America said the bigger risk is that markets may not have priced much tightening, noting the Fed has not raised rates since 1994 when markets had assigned less than a 60% probability to an increase beforehand.

Other market participants highlighted how unusual the uncertainty is ahead of the meeting. Block Scholes estimated a 33.7% hike probability and said only two Fed meetings since 2015 have left markets this closely divided near a decision; Jim Bianco said the Fed chair’s rejection of conventional forward guidance makes a 35% to 40% hike probability reasonable.

Latest closeBitcoin $64,478.87 ▲0.9%

More like this

Sources