Bitcoin barely budged after the United States Federal Reserve hiked up interest rates to a 22-year high on Wednesday.
The largest cryptocurrency by market cap was at the time of writing trading for $29,304 according to CoinGecko, a minimal 0.1% 24-hour increase.
Other digital assets, like Ethereum, the second biggest cryptocurrency, also remained relatively even. Ethereum had not moved at all following the Fed's announcement and was priced at $1,859.
The Federal Reserve raised its benchmark interest rate by a quarter of a percentage point and hinted that the fight against inflation was not over.
America’s central bank paused hiking interest rates at its last meeting in June. It was the first time the Fed had not upped them in 18 months.
But Federal Reserve Chairman Jerome Powell said today that the fight against inflation—which currently stands at 3%—needs to go on until it drops to 2%. A year ago, inflation in the U.S. was over 9%.
"We’ve covered a lot of ground and the full effects of our tightening are yet to be felt," Powell said in a remarks following the meeting. "Inflation remains well above our longer run goal of 2%."
The Fed started aggressively raising rates last year to try and control 40-year high inflation. It hiked them by 75 basis points four times—which negatively impacted the value of stocks, equities and crypto.
Then, the central bank slowed down by raising rates by only 50 basis points, and later by 25 basis points. Powell said after the meeting that it's unclear whether the Fed will raise rates again at the next meeting.
“We haven’t made any decisions about future meetings, including the pace in which we’d consider tightening,” said Powell.
He added that the Federal Open Market Committee (FOMC) would “assess the need for further tightening” on a “meeting by meeting” basis, and further noted that he doesn't expect inflation to fall to 2% until 2025.
Cryptocurrencies were closely aligned to U.S. equities—particularly tech stocks on the Nasdaq—and as such took a beating as traders shifted risk and instead retreated to the dollar.
But that correlation last month hit a three-year low. Bitcoin is up significantly from the beginning of this year, when it was trading for less than $17,000 per coin. It is still down, however, from its November 2021 all-time high of $69,044.
Editor's note: This story was updated after publication with comments from Powell.