Bitcoin, the largest cryptocurrency by market capitalization, rose more than 3% on Thursday to recover from a sharp drop to under US$19,000 after the Federal Open Market Committee said it would raise interest rates by 75 basis points, or in line with market expectations, to rein in inflation.
Bitcoin traded at US$19,634 as of 3 am Hong Kong time, while most of the other top 10 cryptocurrencies by market capitalization rose, according to data by Coinmarketcap.com.
Bitcoin and other cryptocurrency prices have tended to move more in correlation with equities this year.
Fed Chairman Jerome Powell said he is committed to bringing inflation back down to around 2%, from the current rate in excess of 8%, though his challenge is to achieve that without causing a spike in unemployment rate and tipping the economy into a deepening recession.
Raising the cost of borrowing is expected to discourage consumers from taking out loans to buy goods like cars or a new home.
Earlier this month, the U.S. Bureau of Labor Statistics reported that the Consumer Price Index rose 0.1% in August over July, compared to market expectations for a 0.1% decline. August inflation was up 8.3% on year.
See related article: US Treasury seeks public opinion on digital asset risks