The price of the first cryptocurrency dropped below $64,000. The digital asset market reacted with a decline to the results of the first Fed meeting under the leadership of Kevin Warsh.

The regulator kept the key rate at 3.5-3.75% per annum. Despite the crypto sector's expectations, the head of the agency allowed for the possibility of raising it by the end of the year.

The dot plot showed a split in opinions: nine officials expect the rate to be held or cut, while another nine expect at least one hike. Warsh himself declined to give a personal estimate, calling this format "limiting" for future policy.

The head of the Fed announced the creation of five working groups. They will study the regulator's communications, the balance sheet of assets, data sources, the impact of AI on the economy, and methods of fighting inflation.

During the press conference, Warsh mentioned "price stability" more than ten times. Investors regarded his rhetoric as "hawkish." Against this backdrop, the yield on two-year U.S. Treasury bonds rose by 14.4 basis points, and stock indices fell.

The Fed named a jump in energy prices due to the conflict in the Middle East as the main risk to the economy. Kevin Warsh stressed that the agency intends to return inflation to the 2% target, calling this commitment "unconditional."

Market reaction

Bitcoin quotes fell to ~$63,680. Ethereum lost 3.15%, Solana and XRP dropped by 2.9% and 3.8% respectively. Only TRX showed growth, of 0.75%.

The GMCI 30 index, which tracks the largest assets by capitalization, lost 2.6%.

The price of gold fell by 1.39%, and silver got cheaper by 2.79%.

The stock market reacted to the news differently. The S&P 500 and Nasdaq indices rose amid the signing of an interim agreement with Iran and the opening of the Strait of Hormuz.

Recall that on June 17 QCP Capital analysts pointed to the reasons for bitcoin's consolidation.

Source: ForkLog