Decentral Block Post

Bitcoin (BTC) ran out of steam near $23,000 on June 16 after the biggest United States key rate hike in nearly thirty years.

Dollar strength wobbles after rate hike news

Data from Cointelegraph Markets Pro and TradingView showed BTC/USD reaching highs of $22,957 on Bitstamp after the Federal Reserve confirmed a 0.75% hike in June — its largest since 1994.

Momentum did not last long, however, and at the time of writing, the pair had shed $2,000 to return to $21,000 at the new Wall Street open.

Popular trader Crypto Tony eyed the U.S. dollar on the back of the Fed's decision, with an about-turn in USD strength key to a possible Bitcoin bottom.

The U.S. dollar index (DXY), after spiking to twenty-year highs again after the announcement, began retracing through June 16.

The core principles of cryptocurrency were based on financial independence, decentralization and anonymity. With regulations being the key to mass adoption, however, the privacy aspect of the crypto market seems to be in jeopardy.

In 2022, even though no particular country has come up with a universal regulatory outline that governs the whole crypto market, most countries have introduced some form of legislation to govern a few aspects of the crypto market such as trading and financial services.

While different countries have set different rules and regulations in accordance with their existing financial laws, a common theme has been the strict implementation of Know Your Customer (KYC) and Anti-Money Laundering (AML) regulations.

A majority of crypto exchanges operating with a license obtained from the government body or government-affiliated bodies have discouraged any form of anonymous transactions. Even in countries where there is no particular law on privacy coins, there is a ban on private transactions over a certain threshold.

The governments of the United States and the United Kingdom have also demanded regulatory action against the use of coin mixing tools, a service used to obscure the origin of a transaction by mixing it with multiple other transactions.

Ethereum's native token Ether (ETH) slumped on June 16, suggesting that its relief rally, coinciding with the Federal Reserve announcing it will hike the benchmark rate by 0.75%, is at risk.

Ether bulls trapped?

Ether's price slipped by 9.2% to around $1,120 per token a day after it rebounded by 23% after dropping to almost $1,000, its worst level since January 2021.

The ETH/USD pair's upside move, followed by a sharp correction, appeared in tandem with U.S. stocks, confirming that it traded like a risk-asset.

The decline means that Ether has shed 77% of its value since November 2021 and is now trading below its "realized price" of $1,740, data from Glassnode shows.

In addition, a higher interest rate environment adds more selling pressure, with investors leaving high-risk trades and seeking safety in traditional hedging assets, such as cash.