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Bitcoin hits multi-week low after US Fed policy announcement

written by Bella Palmer

Bitcoin dropped to its lowest level since 20 May, trading flat over the past day to change hands for $67,566 on Thursday

Bitcoin dropped to a multi-week low following the US Fed's hawkish announcement at Wednesday's monetary policy meeting.

At this week's Federal Open Market Committee (FOMC) meeting, the Federal Reserve kept its key interest rate unchanged and hinted that it now expects to reduce rates only once this year, a revision from the three quarter-point cuts projected in March.

Equity indices responded to the news by remaining buoyant. The S&P 500 and Nasdaq Composite closed sharply higher at the end of trading on Wednesday.

However, bitcoin dropped to its lowest level since 20 May, trading flat over the past day to change hands for $67,566 on Thursday, as per CoinGecko data.

As expected, the Federal Open Market Committee maintained its benchmark fed funds rate range at 5.25%-5.50% on Wednesday. Nevertheless, its economic outlook now predicts just one 25-bp rate cut this year.

In recent months, there has been modest further progress toward the Committee's 2% inflation objective, according to the FOMC said.

The previous policy statement mentioned a "lack of progress" towards lower inflation.

Other crypto tokens, like ether and solana, declined by 0.6% and 0.2% respectively, as per Coingecko data.

The US SEC approval of spot ether ETFs May was expected to act as a catalyst for ether. Nonetheless, the crypto currency has seen a lull as investors await an announcement of when spot ether exchange-traded funds will begin trading on US exchanges.

Exchange data shows that some traders are seeking greater gains further out on the risk curve within the memecoin subsector, where memecoins inspired by US presidential candidates have rallied.

Donald Trump-inspired memecoins, such as MAGA and Maga Hat, part of the PolitiFi memecoin subsector, have increased by 6% and 23%, respectively, in the past day.


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