The statement of the US Federal Reserve Service put an end to the growth of bitcoin. The first cryptocurrency lost $2,000 in price and returned to $35,000.
Following the results of the January meeting, the Fed announced that it confirms the previously announced reduction of the asset buyback program and plans to raise rates “in the near future.”
“With inflation well above 2 percent and a strong labor market, the Committee expects it will soon be appropriate to raise the target range for the federal funds rate.”
Analysts expect that the Fed will raise its key rate by 25 basis points at its meeting in March 2022.
The expectation of higher rates and lower liquidity in recent months dampened the enthusiasm of cryptocurrency traders.
Prior to the Fed’s announcement, bitcoin was steadily growing, approaching $38,000, but the cryptocurrency returned to $35,000 after the Fed’s announcement.
SkyBridge Capital founder Anthony Scaramucci advises investors not to panic due to the current fall in the cryptocurrency market. He believes that bitcoin, like other digital assets, are the right investment vehicles in the long run and people should not give up on them due to their current price drop.
“Take a chill pill, stay long bitcoin, other cryptocurrencies like Algorand and Ethereum, and I think you’re going to be very well-served long-term in those investments.”