Bitcoin Bounces as Markets Brace for the Fed’s Next Move

In brief

• The Fed raised its benchmark rate 25 basis points to 3.75%-4% on a unanimous 12-0 vote Wednesday, its first hike since July 2023, after traders priced in a 93% chance of the move.
• Bitcoin briefly touched $76,499 after the announcement before settling near $76,300, roughly flat on the day as the broader crypto market held above $2.6 trillion.
• Zcash surged as much as 23% toward $1,425 after Paradigm co-founder Matt Huang disclosed his firm's ZEC stake, calling the token "a private complement to Bitcoin."

Bitcoin traded near $76,300 on Thursday, largely unmoved a day after the Federal Reserve delivered its first interest rate hike since July 2023.

The Fed lifted its benchmark rate by 25 basis points to a range of 3.75% to 4%, a move all 12 Federal Open Market Committee members backed. Traders had priced in a 93% probability of the hike heading into the decision, per CME's FedWatch tool.

Wall Street's reaction ran hotter than crypto's. The Dow sank about 1.2% and the S&P 500 slid 0.4% to 0.5% on Wednesday, while the 10-year Treasury yield had topped 5% earlier in the week, its highest since 2007, as oil pushed above $100 a barrel amid the conflict between Israel and Iran.

Higher rates make Treasurys and cash more attractive relative to assets like Bitcoin and gold that pay no yield, and a hawkish hike tends to strengthen the dollar, a double headwind for risk assets broadly.