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Fed July Records Hint At More Rate Hikes While Bitcoin and Ethereum Slip: Is There Direct Correlation

Published August 17, 2023 12:18 PM
Nikola Lazic
Published August 17, 2023 12:18 PM

Key Takeaways

  • Fed minutes release for July
  • Crypto market slipped by 3%, could it be based on hints of Fed hike?
  • Further rate hikes of 0.25% are likely

The minutes from the Federal Reserve’s two-day July meeting came out yesterday, August 16 . They underscore the central bank’s growing concerns about persistent inflation. Despite a recent quarter percentage point rate hike, which brought the federal funds rate to its highest level in over 22 years, the inflation battle is seen as ongoing by most FOMC members. 

The minutes reveal significant worries about inflation staying above the Committee’s desired range, with tight labor market conditions further complicating the outlook. 

Although some members expressed doubt about the necessity of additional hikes, the consensus leans towards caution, emphasizing the importance of a restrictive monetary policy to steer inflation back to the 2% target. 

While the future direction remains uncertain, with indications that inflation pressures might be easing, the minutes highlight a collective sentiment of vigilance, suggesting a heightened likelihood that the Federal Reserve might raise interest rates again in the near future if current conditions persist.

Bitcoin and Ethereum Slip 

Meanwhile, Bitcoin and Ethereum have slipped from their sideways range in a single percentage decrease of around 3%. Has there been a correlation between the negative sentiment toward the future economic outlook with this decrease in the cryptocurrency market? 

The Fed minutes were released on the official website at 2:00 p.m. EDT yesterday. 

Although the news outlets started reporting soon after due to writing and publishing, the news lagged a bit behind until it caught on. Nevertheless, BTC and ETH prices have already been in a slight downtrend, which only propelled it further. 

At the exact time of the Fed minutes release, the price of BTC and ETH started falling with higher momentum and picked up the pace overnight. The price of Bitcoin was trading at $29,195 and fell to $28,300 at its daily low. Ethereum fell from $1827 to its daily low of $1,777, which is a decrease of 2.69%. 

As seen on the chart above, there is a direct correlation between this news release and the price decline. This is because all markets are currently sensitive to the overall economic sentiment, and crypto is still viewed as the riskiest asset class in particular. 

Fed Meeting in September

The next Federal Open Market Committee (FOMC) meeting will be held on September 19 – 20, 2023. The consensus among financial analysts and other experts on the matter is mixed. 

Some expect that the monetary policy-making body of the Federal Reserve System will most likely make another interest rate hike by another 25-basis-point to moderate inflation to the targeted 2%.  

Others say that it might pause for now as it did in June and evaluate the situation as it fears the economy will get too tight and limit consumer spending. 


Federal Reserve is the most important entity in the global economy since its decisions can impact the value of the US dollar, which is still the global reserve currency. This is why investors and traders all across the world are following their announcements. 

What the Fed does next still remains unclear, but considering that it only made a small blow to inflation and definitely not a win, further action will be required, thus we would be primarily expecting an increase in interest rates.

With the cryptocurrency market standing on shaky legs since April, this might be a catalyst for a larger decline. 


Please note that the contents of this article are not financial or investing advice. The information provided in this article is the author’s opinion only and should not be considered as offering trading or investing recommendations. We do not make any warranties about the completeness, reliability and accuracy of this information. The cryptocurrency market suffers from high volatility and occasional arbitrary movements. Any investor, trader, or regular crypto users should research multiple viewpoints and be familiar with all local regulations before committing to an investment.

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