Bitcoin’s (BTC) price fluctuated after the Federal Reserve announced further monetary tightening on Wednesday, falling to as low as $20,270 in the minutes after the Fed's statement. But roughly an hour after the announcement, the cryptocurrency was changing hands at $21,444.

In a widely anticipated move, the central bank announced that it will raise the fed-funds rate, the interest rate at which depository institutions trade balances held at the central bank, by three-quarters of a percentage point, or 75 basis points.

Fed Chairman Jerome Powell said that members of the Federal Open Markets Committee said the inflation surprise on the upside warranted “strong action at this meeting” rather than waiting another six weeks for the FOMC's next gathering.

“We decided we needed to go ahead, and so we did,” Powell said. “We came to the view that we’d like to do a little more front-end loading on that.”

The rate hike is the Fed's highest since 1994 and underscores the inflationary pressure on the U.S. economy..

The fed-funds rate will rise to a range of 1.5%-1.75%. In the long term, committee members expect the benchmark interest rate to go up to 3.4% this year and to 3.8% in 2023, according to the “dot plot,” a pictorial representation of Fed officials' projections for the central bank's key short-term interest rate published on a quarterly basis.

Bitcoin fell over 5% following the decision but rebounded during Powell’s press conference, where he said that the Fed would boost rates by a half point or three-quarters of a point at each of its next two meetings.

“Markets loathe uncertainty and unpredictability,” said Josh Olszewicz, head of research at Valkyrie. “Digital assets have significantly correlated with U.S. financial markets in recent months, both of which have continued to bleed lower. A decrease in downward volatility will only likely be achieved with a pause or reversal of the current Fed policy and direction.”

Equities also moved up following the Fed statement. The S&P 500 rose 2.1%, and the Nasdaq gained 3.3%.

By Krisztian Sandor

Investors pulled about $1.6 billion from Tether's dollar-pegged USDT stablecoin over the past 48 hours, reducing its circulating supply to $70.8 billion, the lowest amount since last October, according to price tracker CoinGecko.

Tether's USDT has a different financial structure from the Terra blockchain's UST "algorithmic stablecoin," which collapsed last month. But USDT has long suffered from investor doubts about the assets backing it and whether redemptions would be honored in a full-blown crisis.

"Confidence in cryptos remains depressed and some traders are worried that Tether could suffer a similar fate as Terra's UST stablecoin," Edward Moya, a senior market analyst at Oanda, said. "Too many institutional crypto investors are down massively, and they are worried that if this part of the crypto ecosystem collapses, Tether will crash."

Tether dismisses commercial paper rumors: Tether denied claims that its commercial paper portfolio is 85% backed by Chinese or Asian commercial paper. The firm also denied having exposure to Three Arrows Capital, the beleaguered hedge fund, and said it liquidated its position without a loss in crypto lender Celsius Network. Read more here.All eyes on staked ether: The discount on locked-up ether on Lido (stETH) compared with ether (ETH) widened to a record high of 8% as large holders including Celsius and Three Arrows Capital have been selling their tokens potentially to meet margin calls. The “depeg” is leading to concerns about a potential ripple effect on crypto lending markets. In the short term, there will be tremendous selling pressure, but stETH is not Terra – it is highly unlikely to fall to zero. Read more here.NFT-home listing gone wrong: A Manhattan landlord listed his office building as a non-fungible token on OpenSea two weeks ago. The asking price was $29 million, denominated in ether. ETH has plummeted 40% since then the listing, and the price for the building has dropped $12 million. The owner says the building will be relisted in the coming days to adjust for the price drop. Read more here.

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Most digital assets in the CoinDesk 20 ended the day lower.

Sector classifications are provided via the Digital Asset Classification Standard (DACS), developed by CoinDesk Indices to provide a reliable, comprehensive and standardized classification system for digital assets. The CoinDesk 20 is a ranking of the largest digital assets by volume on trusted exchanges.