What 100 BPS Fed Rate Hike Could Mean For The Crypto Market?

The U.S. Consumer Price Index (CPI) for June jumped to 9.1%, according to data released by the Bureau of Labor Statistics today, July 13. The rise in CPI started a liquidation chain across the crypto market, as well as stock markets.

In fact, price pressures will force the Federal Reserve is most likely to go big on the interest rate hike later this month. The CME’s FedWatch tool indicates the probability of a 100 bps interest rate hike at the Fed’s meeting on July 27.

Will Crypto Market Crash Again After Latest CPI Data

Crypto prices tumbled massively after the U.S. Bureau of Labor Statistics announced a 9.1% CPI for the month of June. Bitcoin (BTC) and Ethereum (ETH) prices tumbled to $18,990 and $1019, respectively. This is the highest inflation seen in the U.S. in the last 40 years. The recession fear is also rising as this is the fourth-straight month of rising inflation.

The current scenario confirms a 75 bps rate hike by the Fed on July 27. However, the main concern is a rise in the probability of a 100 bps interest rate hike. The CME’s FedWatch tool indicates a 45% probability of 75 bps and a 55% probability of 100 bps.

The crypto market, which is already under pressure due to the bearish conditions and liquidity crisis, could tumble significantly as a result of the rising interest rates. The interest rate hike by central banks worldwide in the last months had dwindled investors’ interest in crypto, as well as equities.

The cryptocurrencies have been closely tracking stocks for the last few quarters. As investors have reduced their exposure to macroeconomic risk, they have sold off crypto along with equities.

Varinder is a Technical Writer and Editor, Technology Enthusiast, and Analytical Thinker. Fascinated by Disruptive Technologies, he has shared his knowledge about Blockchain, Cryptocurrencies, Artificial Intelligence, and the Internet of Things. He has been associated with the blockchain and cryptocurrency industry for a substantial period and is currently covering all the latest updates and developments in the crypto industry.

The presented content may include the personal opinion of the author and is subject to market condition. Do your market research before investing in cryptocurrencies. The author or the publication does not hold any responsibility for your personal financial loss.