[Bitcoin Now] 1.5% Decline Amid Impact of Interest Rate Hike

Bitcoin prices are declining due to the impact of the base interest rate hike.

Image source=Reuters·Yonhap News

According to CoinMarketCap, a global virtual asset market tracking site, as of 2:47 PM on the 7th, the price of Bitcoin was recorded at $28,946 (approximately 38.41 million KRW), down 1.46% from the previous day.

Bitcoin prices fell following the base interest rate hike. At the May Federal Open Market Committee (FOMC) meeting, the U.S. Federal Reserve (Fed) raised the base interest rate by 25 basis points (1bp = 0.01 percentage points). The U.S. base interest rate increased from the previous 4.75?5.00% to 5.00?5.25%, and Fed Chair Jerome Powell made hawkish remarks, contrary to market hopes for a rate cut within the year. The European Central Bank (ECB) also raised its base interest rate by 0.25 percentage points from 3.5% to 3.75%.

However, despite the base interest rate hike, Bitcoin prices rose at times following news that California regional bank PacWest Bancorp is considering a sale. Since the 4th, Bitcoin prices have remained above $29,000, and on the previous day, they exceeded $29,800, approaching $30,000. It was evaluated that Bitcoin is enjoying a reflective benefit as a new investment destination amid global financial risks. Nevertheless, the impact of the base interest rate hike continued, causing the gains to be relinquished.

Meanwhile, virtual asset investor sentiment remained at a greed level. According to Alternative, a virtual asset data provider, the Fear & Greed Index, which expresses investor sentiment as an index, recorded 64 points (greed), 4 points higher than the previous day. It had dropped to 55 points (greed) on the 5th but showed a recovery trend afterward. Alternative’s Fear & Greed Index means that a score closer to 0 indicates extreme fear and pessimism about investment, while a score near 100 indicates optimism.