The Federal Reserve signaled last week that it would tighten its monetary policy about a year earlier than markets had expected. The US dollar responded to the news by strengthening against other major currencyes, but stock markets have been losing more since then.
Bitcoin, on the other hand, shows fairly decent stability in the US after the announced monetary policy tightening. It has fallen from around $40,000, but has remained well above the $30,000 mark it approached in the first decade of June. Bitcoin continued to trade around $36,000 over the weekend, the level usual since Tesla announced that it would no longer accept the cryptocurrency as currency.
Bitcoin has since traded steadily in the $33,000 to $40,000 corridor, and seems unable to find a clear direction, whether to stronger or weaker values. This can be explained by the fact that markets incorporated the announced tightening of monetary policy into their expectations at the turn of April and May, when US inflation shot to its highest levels in many years. As a result, news from the US Fed meeting no longer had as much impact on bitcoin’s value as, say, stocks or other types of financial assets.