Bitcoin was trading more than 1% less Thursday morning.
The price was around $ 39,395 per piece, while rivals Ethereum and Dogecoin were trading down to around $ 2,452 and 31 cents per coin, respectively, according to Coindesk.
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The cryptocurrency decline started with traders focusing on Fed officials’ revised projection for interest rate hikes by the end of 2023. This is being considered earlier than expected in March. .
The Fed forecasts show that a majority of officials anticipate at least two rate hikes in 2023. In March, officials did not expect to change rates until 2024.
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Officials voted unanimously to keep the benchmark federal funds rate in a range of 0% to 0.25%, where it has been since March 2020, when COVID-19 forced an unprecedented halt to the economy of the country. The Fed will also continue to buy $ 120 billion in bonds each month, a policy known as “quantitative easing” designed to keep credit cheap.
In other news, the Central American nation of El Salvador suffered a setback at the hands of the World Bank. The bank said on Wednesday it could not help with the implementation of bitcoin in El Salvador. The downsides of the environment and transparency have been cited as the reason, according to Reuters.
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“We are committed to helping El Salvador in many ways, including currency transparency and regulatory processes,” a World Bank spokesperson said via email.
“Although the government has approached us for help on bitcoin, this is not something the World Bank can support given the gaps in environment and transparency.”
El Salvador will not replace the US dollar with bitcoin as legal tender, Finance Minister Alejandro Zelaya said on Wednesday.
The country this month became the first in the world to adopt bitcoin as legal tender, President Nayib Bukele touting the potential of cryptocurrency as a transfer currency for Salvadorians abroad.
El Salvador has used the US dollar as legal tender for two decades after abandoning its own currency.