Bitcoin’s price was again tested on Wednesday, dropping close to $20,000 per coin before recovering to around $22,000 after the Federal Reserve announced it would continue to raise interest rates.
The Federal Reserve on Wednesday upped interest rates by 0.75%, the largest it has done in one go in 28 years. The central bank added that it wouldn’t stop there—and that more raises would come later this year.
This caused the price of Bitcoin, the largest cryptocurrency by market cap, to drop to $20,392 Wednesday afternoon Eastern Time. It has since bounced back, and at the time of writing was trading at $21,559.63, according to CoinMarketCap.
Bitcoin and the wider cryptocurrency market have taken a beating over the past several weeks as investors shed risky assets from their portfolios.
The digital asset space has been very closely correlated with equities. Bitcoin did today what it has been doing for the most part this year—and following the stock market: on the news, the S&P500 and Dow Jones Industrial Average also dropped before rallying.