Bitcoin’s price fell dramatically when the Federal Reserve announced that it would raise interest rates by 75 basis points to tackle sky-high inflation.
The largest crypto by market cap fell below $19,100 before rebounding amid significant market turbulence. It is currently trading at around $19,029, down about 1% in the previous hour. Bitcoin has also fallen by about 5.72% in the last seven days.
Market analysts predicted that the Fed would hike interest rates again today by 75 to 100 basis points. Bitcoin, other cryptocurrencies, and stocks appear to have priced in these forecasts this week, while nervous traders sold lower today. Stocks fell in response to the news, with the Dow Jones and the S&P 500 falling by around 0.73%.
The concept of bitcoin as a mechanism of exchange has resurfaced in recent years as one of the major storylines in this sector. Finally, that is a required component of anything that aspires to be money. Storing value in the context of money is pointless unless you can easily exchange it, and Lightning is the most promising instrument at the moment for genuinely scaling that ability.
The term “medium of exchange” refers to more than just people paying for coffee; the full function of a medium of exchange occurs at every level and scale of the economy for purchases far more valuable than your everyday Starbucks latte.
This is where Bitcoin really thrives massively as a medium of exchange. SWIFT processes around $5T in payments daily, or $1.25 quadrillion per year. One only needs to look at the numerous Russian banks disconnected from the SWIFT system to recognize the potential risks of relying on it to settle foreign payments.
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