Replays · FOMC · 22 Mar 2023, 18:00 UK
Calm for 45 minutes, then a cliff
Eleven days after Silicon Valley Bank failed, the Fed had to decide whether to keep raising rates during a banking scare. It raised them by a quarter point. For three-quarters of an hour crypto did almost nothing. Then it fell hard.
- 1 18:45 UK: the drop begins
- 2 20:00 UK: low, about 6.7% down
The decision
The Fed lifted its target range to 4.75–5.00%, its ninth hike since March 2022. The statement said the US banking system was sound and resilient, and it softened earlier language about ongoing increases, saying only that some additional firming may be appropriate.
The drop
Bitcoin was $28,595 at 18:00 UK and was close to that price at 18:45. Over the next hour and a quarter it fell steadily, reaching about 6.7% down at 20:00 UK. At the hour it was -1.77%, ranked #13 of 80 Fed decisions in our data and 4.1 times a normal hour. The two-hour figure, -6.5%, is the more striking number.
US stocks fell in the same window. The S&P 500 ETF went from roughly flat at an hour to -1.6% at two hours. That afternoon in Washington, Treasury Secretary Janet Yellen told a Senate panel that the government was not considering blanket insurance for all bank deposits, and US news coverage linked the late fall in bank shares partly to her remarks. We can't separate her comments from Powell's in our data, so we note both.
| Market | 30m | 1h | 2h | 24h | × normal hour |
|---|---|---|---|---|---|
| Litecoin | +2.67% | +1.89% | +2.61% | +15.55% | 3.2× |
| Dogecoin | +1.07% | +0.28% | −2.62% | +3.11% | 0.5× |
| Chainlink | −0.27% | −0.40% | −5.50% | +1.48% | 0.6× |
| Ethereum | −0.01% | −0.98% | −3.96% | +2.10% | 1.8× |
| XRP | +0.04% | −0.82% | −6.07% | +0.93% | 1.2× |
| Cardano | −0.21% | −1.66% | −7.04% | +0.44% | 3.1× |
| Solana | +0.69% | −0.59% | −5.79% | −0.80% | 1.0× |
| Bitcoin | −0.19% | −1.77% | −6.49% | −0.84% | 4.1× |
Change from the 18:00 UK statement, sorted by the first hour.
One coin went the other way
Litecoin was the exception. It was +1.9% after an hour and +2.6% at two hours while everything else in the table was falling, and it finished the 24-hour window +15.5%. Nothing in the Fed news explains a move like that.
Most of the market recovered within a day: Bitcoin was -0.8% at 24 hours. Over the week, XRP rose 25%. Later that day, Coinbase also said it had received a Wells notice from the SEC, warning of possible enforcement action. That came after this replay's two-hour fall, but it is inside the 24-hour and one-week windows.
Sources: release time and figures from the Federal Reserve's statement and target range (FRED DFEDTARU). Crypto: Bitstamp 5-minute candles; SPY/QQQ: IEX. No consensus forecasts are shown because they are proprietary; comparisons are with the previous release. “× normal hour” compares the first-hour move with the median move in matched quiet hours. How we measure it.