Bitcoin drops following Fed decision after topping $18,000 for first time in over a month

Bitcoin drops following Fed decision after topping $18,000 for first time in over a month

Bitcoin prices have been under pressure in 2022 after the collapse of algorithmic stablecoin terraUSD and subsequent bankruptcy filings from lender Celsius and hedge fund Three Arrows Capital.

Nicolas Economou | Nurphoto | Getty Images

Bitcoin fell on Thursday after the U.S. Federal Reserve indicated further interest rate hikes ahead and investors continued to monitor the fallout from the collapse of cryptocurrency exchange FTX.

It came after the world’s largest digital currency topped £18,000 Wednesday for the first in more than a month, trading as high as $18,356.50.

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By 4:27 a.m Thursday. ET, bitcoin was trading around $17,667.89

Ether, which hit a more-than one-month high on Wednesday of over $1,350, also fell. The cryptocurrency was trading at around $1,286.97 at 4:27 a.m. ET.

Bitcoin fell from the $18,000 mark after the U.S. Federal Reserve raised its benchmark interest rate by 0.5 percentage points to its highest level in 15 years, and indicated there would be further hikes next year.

U.S. stocks fell after the Fed’s decision. Bitcoin has become closely correlated with U.S. stock indices, in particular with the tech-heavy Nasdaq.

Investors are also watching the continued fallout from the stunning collapse of FTX which led to the company filing for bankruptcy and the arrest of its high-profile founder Sam Bankman-Fried. Bankman-Fried has been hit with criminal charges by U.S. federal prosecutors as well as civil indictments from American regulators.

The company was accused of commingling FTX customer funds with assets from Alameda Research, Bankman-Fried’s hedge fund.

John J. Ray, the company’s new CEO, told lawmakers that what FTX was doing “is really just old-fashioned embezzlement.”

Meanwhile, Binance, the world’s largest crypto exchange, came under pressure after it paused withdrawals of the stablecoin USDC this week, with investors fearing issues at the company. However, Binance resumed withdrawals after around 8 hours of downtime.

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