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The U.S. Federal Reserve has raised the federal funds target range rate by 25 basis points to 5.5.75%. 

Wednesday’s interest rate decision was largely expected, with traders pricing in such a rise ahead of time. The Fed’s statement removed language signaling further rate hikes. 

“In determining the extent to which additional policy firming may be appropriate to return inflation to 2 percent over time, the Committee will take into account the cumulative tightening of monetary policy, the lags with which monetary policy affects economic activity and inflation, and economic and financial developments,” the Fed’s statement read. 

Today’s release shows a softening in language compared to the March statement, when the Fed said, “The Committee anticipates that some additional policy firming may be appropriate in order to attain a stance of monetary policy that is sufficiently restrictive to return inflation to 2 percent over time.”

“One and done is the prediction of Fed policy based on the pricing of U.S. interest rate futures,” Trakx’s Ryan Shea told The Block ahead of the decision, meaning today’s 25 basis point hike will mark the conclusion of the most aggressive U.S. monetary tightening cycle in 40 years.

“Given ongoing tension in the U.S. banking sector, which just claimed its third victim following JPMorgan’s acquisition of First Republic Bank this past week, investors are anticipating a fairly swift reversal in Fed policy,” he added. There is a near 82% probability of a pause at the next meeting in June, according to CME’s FedWatch.

Bitcoin’s price was unchanged following the news, trading around $28,500.

The leading cryptocurrency by market cap slipped to about $28,200 leading up to the Fed’s decision. Bitcoin has been suspect to sharp price moves over the past four months as market liquidity reached fresh lows. Liquidity refers to the depth of the market or the ability of buyers and sellers to execute trades close to the market price.

Digital asset trading firm QCP Capital said the market is currently lacking direction, and the biggest obstacle for crypto remains the U.S. dollar.

“For the USD (DXY), the key level to the topside is 102.5, where we expect a break higher to lead to a sharp correction lower in crypto,” QCP’s market update noted. 

The dollar tends to get stronger as the Fed increases interest rates. The DXY is trading around 101.25, having slipped to 101.08 following the announcement, according to data via TradingView.

© 2023 The Block Crypto, Inc. All Rights Reserved. This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.

This latest move by the U.S. central bank brings the targeted range for its benchmark fed funds rate to 5%-5.25%.

Coinbase is slated to deliver its first-quarter earnings after the close on Thursday, and all eyes will be on trading volumes and monthly transacting users after the period was dominated by regulatory concerns.

The two metrics will offer insight into how the exchange performed during the quarter. Interest income from USDC helped the exchange beat revenue estimates in the last quarter and will be important again. 

The exchange beat revenue estimates in the fourth quarter of 2022, but retail trading volumes continued deteriorating.

What to watch

Interest income from USDC came in at $146 million in the last quarter, up more than 100% from the previous quarter, even as full-year revenue fell. This income helped improve the exchange’s revenue during the quarter. 

Coinbase stock had taken off at the beginning of the year, rising 72% from all-time lows in December. The stock’s rally has met headwinds as the exchange faces regulatory scrutiny. 

Coinbase vs. the SEC

Coinbase has sued the SEC before the regulator could advance its prospective case against the exchange.  

The lawsuit seeks clear answers surrounding crypto rulemaking. It may be the company’s best chance to take on the SEC and speed up a lengthy court battle it already faced. 

© 2023 The Block Crypto, Inc. All Rights Reserved. This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.

With Coinbase under pressure from the SEC’s scattershot enforcement, it’s time to reassess the most boring cryptocurrency exchange on the planet.

Pepe the memecoin has been all the rage in recent days after the price skyrocketed more than 250% in the last week.

At the same time, pepe’s market capitalization surged to $582 million on Tuesday before whipsawing to $397 million on Wednesday. Beyond the froth, however, there’s another story of limited liquidity and whales dumping the coin, according to Xin Yi, a research analyst at Nansen.

“There are a lot of large holders who got in early and the token price has gone up a lot since then so when they take profits it tends to move the price and market capitalization significantly as people tend to follow the movement of these ‘whales,’” she told The Block. “[But] liquidity is rather thin given the market capitalization.”

Yi points to one “whale” selling $2.2 million of Pepe but only receiving $650,000 worth of ETH “due to massive slippage.” In the last 24 hours, several other whales have also sold off more than $1 million a piece, she also said.

© 2023 The Block Crypto, Inc. All Rights Reserved. This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.

The advocacy group will refocus its efforts on petitioning regulators and officials in Washington.

Developers are flourishing elsewhere amid strident relationships with U.S. regulators.

Crypto investment products are commonly weighted by market cap. We examine how a small adjustment to market-cap weighting methodologies may better align digital asset portfolios with their intended objectives.

The new token based on “pepe the frog” meme remains one of the most researched tokens for users of blockchain analytics firm Nansen and price tracker CoinGecko.

The law on promotions is set to come into effect around four months from now, the finance ministry has said.