According to the minutes of its July meeting, inflation is still “unacceptably high,” according to the U.S. central bank authority. Today’s dip in crypto markets was caused by the Federal Reserve releasing minutes of its July meeting, in which it stated that it would continue raising interest rates to control inflation.
The price of Bitcoin dropped 0.9% within an hour after the Fed announcement and was down 2.4% overall. Ethereum fell 0.9% and 2% over the course of the day.
At the time of writing, $23,303.53 was the market capitalization of the world’s largest cryptocurrency. CoinGecko data revealed that Ethereum, the second-largest digital asset, was listed at $1,844.10.
Stock market also fell due to the news: Dow Jones fell 0.1%, S&P 500 dropped 0.2%, and Nasdaq fell 0.6%.
Minutes from the July 26-27 U.S. central bank authority meeting show that inflation was still too high despite strong labor markets and low unemployment. There was also no evidence that it would drop.
The minutes stated that participants observed that inflation was still unacceptablely high, well above the Committee’s long-term goal of 2 percent.
It stated that it would need “at some point” to slow down rate increases, but this would depend on future data.
The U.S. has seen inflation rise to a record four-decade high. Rising prices are affecting many countries all over the globe.
This year, Bitcoin, Ethereum and almost every other token and coin in the crypto market were largely correlated to U.S. equities.
The majority of cryptocurrency investors have sold them with risky assets like tech stocks. They prefer to keep their U.S. dollars. This has allowed the dollar, the world’s most important reserve currency, to continue its steady climb.