Grayscale: This Fed rate hike differs from the 2022 tightening cycle

Odaily reports: Digital asset management company Grayscale stated in an analysis published on September 17 that the latest Federal Reserve rate hike is closer to a "mid-cycle adjustment" rather than a major monetary policy shift.The Federal Open Market Committee raised the target rate range by 25 basis points to 3.75%–4% on September 16, stating that the hike aims to bring inflation back to the 2% target in a more timely manner. Grayscale believes that this rate hike, along with a possible second hike later this year, is unlikely to cause major changes in the digital asset market.Grayscale noted that from March 2022 to July 2023, the Federal Reserve raised rates by a cumulative 525 basis points, with sustained tightening increasing returns on cash and yield-bearing assets and raising the opportunity cost of holding Bitcoin; the current environment, by contrast, is a single rate hike following years of hikes, cuts, and holding steady.Grayscale stated that the impact of rate hikes will vary by crypto business model. Stablecoin issuers could benefit from increased interest income on reserve assets, and higher yields on tokenized bonds and money market funds could also attract capital inflows into on-chain financial products. On September 17, Bitcoin briefly rose above $77,000, with short position liquidations in the crypto market reaching nearly $260 million during the rebound. (Bitcoin.com News)