Bitcoin Mirrors 2022 Setup as Fed Resumes Rate Hikes — SkimNews
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- The Federal Reserve raised interest rates by 25bps, taking its benchmark range to 3.75%-4.00%—its first increase in more than three years.
- Markets are pricing in a further 75 basis points of tightening over the next six months.
- Bitcoin currently sits roughly 40% below its October high of $126,000, matching its position ahead of the Fed's March 2022 hike when it was 40% below its November 2021 peak of $69,000.
- After that initial 2022 hike, Bitcoin rallied approximately 18% over 12 days before subsequently falling around 50%.
- Since 1994, the Fed has gone "one and done" only once, with single increases a rarity across the 12 tightening cycles since 1955.
- Core inflation eased to 2.4%—a five-year low—but WTI and Brent crude have climbed above $100/barrel amid Middle East tensions, threatening to reignite inflation.
- The U.S. 10-year Treasury yield has reached 5%, adding pressure to financial conditions and risk assets.
Why it matters: The 2022 parallel cuts both ways: if Bitcoin repeats the post-hike pattern, holders could see a short-term relief rally followed by a further ~50% decline as the Fed prolongs tightening. Markets have already priced in 75bps more hikes over six months, and single "one and done" increases have occurred only once since 1994—meaning this cycle likely has more room to run against risk assets.
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