After the Federal Reserve raised interest rates, the price of Bitcoin fluctuated and stabilized, dropping nearly 4% over the week

After the Federal Reserve announced an interest rate hike, the price of Bitcoin initially fell and then stabilized, remaining basically flat within 24 hours. According to Bitcoin Magazine, the Federal Reserve raised the target range for the federal funds rate to 3.75% to 4%, marking the first interest rate hike since 2023. Bitcoin briefly dropped to $75,355 within an hour of the announcement, before rebounding to nearly $75,813.

Over the past 7 days, Bitcoin has cumulatively fallen nearly 4%. Traders had previously bet on a greater than 90% probability of an interest rate hike at the Federal Reserve's September meeting, which is why most Bitcoin trading occurred before the announcement on Wednesday. Federal Reserve Chairman Kevin Warsh stated that price stability is the Federal Reserve's top priority, and noted, "Inflation is too high and has lasted too long; the inflation data this summer does not indicate that the underlying trend has improved significantly."

Warsh has publicly praised Bitcoin, and during his first major speech since taking office as Federal Reserve Chairman last month, he also emphasized that inflation is too high and must be reduced. The new chairman's stance contrasts with that of Trump, who has repeatedly called for interest rate cuts and threatened to fire former Federal Reserve Chairman who refused to cut rates. Last week, Trump posted on Truth Social, "We should have the lowest interest rates in the world." Bitcoin typically performs better in a low-interest-rate environment, as there is more liquidity in the market to buy the asset.