Bitcoin slips off the fed session before it recovers, but what next?

the central theses

• Federal Reserve increases by 25 basis points, Bitcoin falls by over 6 %
• , however, a recovery of the prices follows, since the market relies on interest reductions
• Bitcoin originally fell to $ 26,700 and is now again
• The tight monetary policy seems to end, and that is exactly what Bitcoin investors want to hear
• The downside is that Bitcoin's reputation may have been clouded by chaos in the industry last year
• Whether institutional money and Wall Street capital crypto will be trusted again, it remains to be seen

As in the last year, bitcoin continues to fluctuate wildly based on interest expectations.

The orange coin crashed on Wednesday after the last FOMC session when the interest rates were raised by 25 basis points, although some analysts demanded a break after bank turmoil of the past few weeks.

Why did Bitcoin fall?

The chaos of the banking markets was so great that the markets had priced in a real chance before the meeting that there would be no more interest increases.

trigger of the crisis was the Silicon Valley Bank (SVB), which attacked Europe last week before the spectacular fall of the Swiss bank Credit Suisse founded in 1856.

When the insoles fled from the banks and the markets shaken, things collapsed - as is often the case when the interest is rushed. And this past cycle was the fastest form of tightening in the recent past.

Bitcoin fell from $ 28,500 to $ 26,700, when the FED announced an increase of 25 basis points, which corresponds to a decline of 6.3 %.

However, Bitcoin has recovered a bit since then and is traded at $ 27,600. This happened when the market started to digest the discourse of Fed chairman Jerome Powell about the future development of interest rates.

Although the rate increase took place yesterday, it feels increasingly certain that the restrictive monetary policy comes to an end. It should be remembered that this increase before the downfall of the SVB had practically guaranteed 50 basis points.

and with a view to the interest until the end of July, the market predicts cuts rather than increases. So while the increase of 25 BPS may have been false, the language afterwards and the conclusion from the meeting was exactly the opposite.

Will Bitcoin rise?

The question that is on everyone's lips within crypto is then what that means for Bitcoin's price. As always, it is a difficult question to answer, but the future is undoubtedly rosier for the coin today than it is a few months ago.

Not only is the scandal of FTX and the wave of bankruptcy, which followed the dirty collapse of the former Tier 1 exchange, but the end seems to be close to the tight monetary policy.

Bitcoin was introduced in 2009 and therefore never experienced anything other than an angry bull market in the overall economy. The S&P 500 rose by seven times from the low point of the GFC to its maximum - and Bitcoin rode in addition to technology shares on the wave of low interest rates, warm money printer and a completely perfect climate.

When inflation roared last year, this turned completely. Since the interest rates were raised aggressively, Bitcoin had no way to maintain its earlier buoyancy. It came down and it came down hard.

After all, the hard monetary policy that she pulled through the gutter seems to approach the end. And although this does not guarantee anything, it will certainly remove the shackles, so at least there is the possibility that it will come off.

is the image of Bitcoin clouded?

The downside of the argument is that the extent of the damage last year was so considerable that the long -term development of Bitcoin was dampened and it will not be able to get on the same track.

crypto winter came and gone in the past, but, as I said, this youngest fell together for the first time with a defeat in the broader economy. It also came while Bitcoin was a mainstream finance value-something that did not apply in previous cycles.

breakdowns such as FTX, Luna and Celsius not only looted capital from space, but ashamed crypto on the big stage, as unfair that is towards the good players in the industry. Will institutional funds and trad-fi funds like to trust crypto again?

It is an interesting debate, and only time will show it.