Fed Rate Hike Causes Spike In Bitcoin Price, Elon Musk Changes Twitter Profile Pic to BAYC, SEC Beefs Up on Crypto and Cybercrime Unit

Fed Rate Hike Causes Spike In Bitcoin Price

The Federal Open Market Committee (FOMC) announced an interest rate hike of 0.5% on Wednesday. It is the highest single rate hike in over 22 years. The Bitcoin price spiked by 6% following the news. 

In its efforts to ease the inflation caused by the Covid crisis, the US Federal Reserve increased interest rates. It is the second of seven scheduled interest rate adjustments for the year. 

During the Covid 19 crisis, the Fed printed $13 trillion to aid the economy. The side effect, however, was an 8.5% inflation rate. High inflation devalues the currency and makes the standard of living more expensive.

Although Bitcoin is a hedge against inflation, it is highly correlated with the U.S. stock market, particularly the Nasdaq. The Nasdaq shot up by 3% after the announcement. However, it is on a downward trend and is expected to continue down due to the hike in interest rates.    

Elon Musk Changes Twitter Profile Pic to BAYC

Elon Musk, CEO of Tesla, changed his Twitter profile pic to a collage of Yuga Labs Bored Ape Yacht Club (BAYC) NFTs. He then tweeted, "I dunno … seems kinda fungible." Though open for interpretation, the tweet made the price of ApeCoin, a Yuga Labs creation, spike up by 20% in under an hour. 

Musk is familiar with cryptocurrency, admitting to owning some Bitcoin, Ethereum, and Dogecoin. He has spoken of Web3 development as a ‘marketing gimmick’ rather than an actual application, though he has never commented on NFTs before. 

Musk has over 90 million followers on Twitter and last month expressed his desire to buy the social media platform by offering an unsolicited bid of $54.20 per share. 

SEC Beefs Up on Cryptocurrency Security Team

The SEC (Securities and Exchange Commission) announced the allocation of 20 additional positions to the unit responsible for protecting investors in crypto markets, nearly doubling its size. The expansion is to protect crypto investors by focusing on Crypto asset offerings, Crypto asset exchanges, Crypto asset lending, and staking products, Decentralized finance ("DeFi") platforms, Non-fungible tokens ("NFTs"), and Stablecoins.

The Crypto Assets and Cyber Unit, formerly named The Cyber Unit, is now a team of 50 people. The unit was formed in 2017. It has prosecuted over 80 cases and seized over $2 billion in assets. "The U.S. has the greatest capital markets because investors have faith in them. And as more investors access the crypto markets, it is increasingly important to dedicate more resources to protecting them," said SEC Chair Gary Gensler.

Written by Lindi Miti © Crypto University 2022