This week bitcoinAll eyes will be on the FED.
It is eagerly awaited how the markets will react to the Fed’s first rate hike decision after 2018.
Let’s examine Bitcoin’s reaction to previous rate hike decisions.
First Interest Rate Increase Decision Made in 2015
After the 2008 mortgage crisis, the FED did not increase interest rates for about 7 years and kept the interest rate constant in the range of 0-0.25.
At the end of 7 years, the first rate hike decision was taken on December 16, 2015, and interest rates in the USA were increased by 0.25.
as of December 16, 2015 bitcoin You can see the price action in the chart below.
In the next 8 meetings, the interest rate was kept constant and the next increase took place on December 14, 2016.
Ongoing Interest Rate Increase Process Happened
After this date, until the end of 2018, continuous interest increases were made in two and four-month periods, and at the end of the process, the interests came to the level of 2.5%.
While interest rates increased in the USA, Bitcoin experienced the bull and bear of 2017 together. While the interest rates rose up to 1.5%, Bitcoin, which was bull, later entered a downtrend. (On December 13, 2017, interest rates rose to 1.5%.)
In 2019, the FED kept the interest rates constant at 2.5% in 5 consecutive meetings and started to cut interest rates for the first time on July 31, 2019. At the March 15, 2020 meeting, the interest rates were pulled to the current 0-0.25 band.
You can see the effect of the critical interest rate decisions on the price in the charts above.
*Not Investment Advice.