Cryptocurrencies performed mixed on Thursday, as traders assessed the likelihood of the Federal Reserve raising interest rates again before the end of the year, amid continued uncertainty about the direction of US monetary policy.
This came after the minutes of the Federal Reserve’s last meeting showed a split among policymakers over the justifications for raising interest rates, with some members arguing that tightening monetary policy may be necessary to contain energy and price shocks, while another faction favored raising interest rates to counter demand-driven inflation.
According to the Chicago Board of Trade's FedWatch tool, markets are currently pricing in an 18% probability of an interest rate hike later this month, compared to an 80% probability of a hike in December.
Despite Bitcoin's decline, the world's largest cryptocurrency by market capitalization continued to trade above $83,000, while it has fallen by more than 5% since the beginning of the year.
In trading, Bitcoin fell by 0.43% to $83,034.36, a loss of $353.39, while Ripple dropped by 0.94% to $1.4083, a decrease of approximately $0.0134.
In contrast, Ethereum rose 0.19% to $2,571.38, an increase of $4.76.
US interest rate movements remain a key factor in determining the direction of cryptocurrencies, as continued expectations of monetary tightening could increase pressure on riskier assets. Conversely, a decrease in the likelihood of a near-term rate hike could provide the market with some breathing room, but ongoing divisions within the Federal Reserve keep the price path volatile.
