In financial markets, interest rate hikes are a hotly debated topic. When the base point for interest rate hikes changes, it will have a profound impact on the market, and Bitcoin, as an emerging digital currency, also fluctuates under this influence. This article will delve into the meaning of 75 basis points of interest rate hikes and the performance of Bitcoin in this context, analyzing its impact on the market.

What does a 75 basis point interest rate hike mean? This is not only a set of numbers, but also an important signal for economic policy adjustments. The interest rate base point refers to the basic unit when the central bank adjusts interest rates, generally 0.25%. When we hear "75 basis points of interest rate hikes," we actually mean that interest rates have increased by 1.75 percentage points, which is of great significance to both the economic system and financial markets.

Against this background, Bitcoin, as a decentralized and anonymous digital currency, has also begun to attract market attention. Changes in the base point of interest rate hikes may trigger investor demand for safe-haven assets. As a safe-haven asset, Bitcoin's price fluctuations are often affected by macroeconomic policies. Next, we will analyze in detail the impact of interest rate hike base point changes on Bitcoin prices.

First, an increase in the base point of interest rate hikes usually leads to increased volatility in traditional financial markets. Investors may turn to safe-haven assets in search of more stable investment options. In this case, as a non-traditional asset, the price of Bitcoin tends to fluctuate. Past data shows that Bitcoin prices may experience short-term declines when the interest rate base rises, but in the long term, its properties as a safe-haven asset may drive its price upward.

Secondly, changes in the base point of interest rate hikes will also affect capital flows in global markets. Funds may flow from some emerging markets to more stable markets, and this flow of funds will also affect digital currency markets such as Bitcoin. Since the liquidity of the Bitcoin market is relatively weak, large-scale inflows or outflows of funds may trigger severe price fluctuations, and investors need to be cautious in dealing with such market changes.

In addition, changes in the base point of interest rate hikes will also have an impact on the global economic situation. Fine-tuning of economic policies may lead to a slowdown or acceleration of global economic growth, which will directly affect the price trends of various assets, including Bitcoin. As economic uncertainty increases, investor demand for safe-haven assets may increase, which also provides development opportunities for digital currency markets such as Bitcoin.

To sum up, the change of 75 basis points of interest rate hike is not only a change in numbers, but also a reflection of economic policy and market expectations. As an emerging asset, Bitcoin has also shown unusual performance in this context. Investors need to remain vigilant, respond to market fluctuations rationally, and seize investment opportunities. There are huge market changes hidden behind the base point of interest rate hikes, and Bitcoin, as an emerging digital currency, will continue to explore its own development path amidst these changes. I hope every investor will remain rational in this market wave, seize opportunities, and face challenges.

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Binance INTL	OKX INTL	Gate.io INTL	Huobi INTL
China Line　APP DL	China Line　APP DL	China Line　APP DL	China Line　APP DL

Note: The above exchange logo is the official website registration link, and the text is the APP download link.

There has been a flurry of troubling inflation reports in recent days that will likely lead Fed officials to consider a surprise 0.75 percentage point rate hike at this week's meeting. In fact, these Feds have stated as early as the silent period before the meeting on June 4 that they are ready to raise interest rates by 0.5 percentage points this week and raise interest rates again by 0.5 percentage points at the July meeting. However, their final decision has yet to be announced. It depends on whether the economic situation matches its expectations, and now price increases in May have exceeded the Fed's expectations. Many investors still don’t know what a 75 basis point interest rate hike is? They don’t know what impact this will have on Bitcoin. Let the editor of the currency circle analyze it for everyone.

 What is a 75 basis point interest rate hike?

 75 basis points is 0.75 percentage points, or 0.75%, so a 75 basis point interest rate increase is an increase of 0.75% on the original interest rate. Basis
Point (bp) is used in finance to measure the amount of change in interest rates on bonds and bills. One basis point is equal to 1% of 1 percentage point, or 0.01%, so 100 basis points is equal to 1%.

If the Fed raises interest rates by 75 basis points at its June and July meetings, it will quickly raise interest rates to near the Fed's expected neutral interest rate. The target range for the federal funds rate will climb to 3.25%-3.5% by the end of the year - which means that investors may usher in the most violent interest rate hike cycle since the 1980s.

Rising inflation expectations are the reason why the Federal Reserve has to accelerate interest rate hikes. The median one-year inflation expectation in the United States increased by 0.3 percentage points from the previous month to 6.6% in March, which was the same as the historical high in March and the highest increase since the survey was recorded in 2013. Currently, the three-year median inflation expectation remains basically at 3.9%.

Investors and economists are worried that once inflation expectations rise significantly and break away from their "anchoring", it means that the Federal Reserve will be forced to take tougher measures in the future to effectively curb inflation. Under this circumstance, the call for raising interest rates sooner rather than later is gradually becoming louder.

This past weekend, the national average gasoline price exceeded $5.0 per gallon for the first time in history. The "rapidly changing" gasoline prices have dashed hopes that U.S. inflation will peak and fall before this summer. The U.S. Consumer Price Index (CPI) rose 8.6% year-on-year in May, the highest level since December 1981. Analysts at Barclays and Jefferies were the first to forecast a 75 basis point rate hike on Wednesday following the troubling inflation report.

 What impact will a 75 basis point interest rate hike have on Bitcoin?

Since the May CPI data released by the United States last Friday exceeded expectations, global investors have sold off risk assets due to concerns that inflation will last longer. Among them, the worst performer was the cryptocurrency market. According to CoinDesk data, the price of Bitcoin once fell below $30,000.

Bitcoin will enter a long-term downward channel in the future, and it is not ruled out that it will eventually become a bubble asset, or even become a high-risk asset after the bubble bursts. Bitcoin has created a price myth, but the essence of Bitcoin is to become a world currency. If it does not have the functions of circulation and savings, but is a highly volatile asset, then in the end there will be problems with this belief itself. What is certain is that as the Federal Reserve raises interest rates, it is inevitable that cryptocurrencies such as Bitcoin will fall, as will the decline in trading volume and liquidity.

The decline of Bitcoin and Ethereum is because these virtual currencies themselves are risky assets. In the context of the Federal Reserve raising interest rates, the appreciation of the US dollar has increased the pressure on the depreciation of risky assets. Therefore, virtual currencies are currently in a downward trend. It is difficult to judge whether the virtual currency will eventually return to zero. It depends on the value squeeze of the strong US dollar on the virtual currency. What is certain is that when the Federal Reserve raises interest rates, the decline of cryptocurrency is inevitable, as is the decline in trading volume and liquidity. of.

The above is the editor's answer to the question of how much a 75 basis point interest rate hike will be, and the analysis of the impact on Bitcoin. If the Federal Reserve continues to raise interest rates significantly, the liquidity in the market will definitely be significantly reduced, and the entire currency market will be affected by this, and there will also be a sharp decline. After all, these prices are inflated, not real growth. . As ordinary currency market investors, in addition to paying attention to the Federal Reserve’s interest rate hikes, inflation control and economic recession signals, everyone also needs to pay attention to the fact that this sharp drop in the currency circle is also related to the collapse of the stablecoins TerraUSD and Luna tokens. To a certain extent, cryptocurrencies are still very risky for most investors.