Bitcoin ( BTC-USD ) wiped out this week's gains after the Federal Reserve raised interest rates as expected Wednesday afternoon and Chair Powell dismissed the notion that rate cuts will occur this year as inflation still remains too high. Although some 72% higher from the start of 2023, bitcoin ( BTC-USD ) pulled back as much as 5.1% to $26.74K during the intraday session, only to pare back some of those losses at the time of writing, changing hands at $27.48K as of shortly before 5:30 p.m. ET. Ethereum ( ETH-USD ), the world's largest altcoin by market cap, also fell 3.2% to $1.74K. The broader stock market saw downward pressure , too, as Powell stressed that the Fed will keep lifting rates higher than expected if need be. “Rate cuts are not in our base case,” he said in the press conference following the Fed's latest 25-basis-point rate increase. Bernstein correctly predicted that crypto prices would sell off, " but not by much ," should the Fed hike its benchmark rate by 25 bps. That's because "such a move further hurts the banking system." "Surprisingly, with the collapse of top banking firms over the past week, more investors have re-ignited their trust in Bitcoin as a better safety asset, thus driving a renewed growth surge," said Dmitry Ivanov, chief marketing officer at crypto payments ecosystem CoinsPaid. "This growth surge can be compounded in the coming weeks as the new Bank Term Funding Program (BTFP) floated by US regulators to ease the liquidity crunch among banks is set to introduce billions of newly printed cash into the economy," he added. Unsurprisingly, crypto-exposed stocks traded in a sea of red, with MicroStrategy ( MSTR ), -9.7% , Riot Platforms ( RIOT ), -10.7% , Marathon Digital ( MARA ), -12.3% , Coinbase Global ( COIN ), -8.2% , and Hut 8 Mining ( HUT ), -12.5% , among some of the biggest decliners. See why SA contributor Bitfreedom Research thinks bitcoin ( BTC-USD ) is primed for its next bull phase .
