All eyes are on the Federal Reserve this week as the U.S. central bank is widely expected to increase benchmark interest rates by another 0.75% on Wednesday, following a similar move in June, the largest hike since 1994.

A solid run up over the past month saw Bitcoin and Ether rally 26% and 65% respectively from their June lows, pushing crypto’s market capitalization back above $1T.

As the price of everything from oil to corn soared this year, the Fed has aggressively raised interest rates in a bid to cool the economy and rein in demand. At a consumer level, rising interest rates encourage people to spend less and save more, as financing big-ticket items like houses becomes more expensive.

For businesses, the increased cost of capital dissuades investment in growth, and combined with weaker consumer spending, can lead to reduced revenues. Heavily indebted companies will see their interest expenses rise, leaving fewer resources available for spending.

Higher rates also increase the cost of servicing the $30T American national debt, with each percentage-point rise adding hundreds of billions of dollars to the annual interest bill.

Inflation in the US hit a record 9.1% in June, leading some to speculate that the Fed would go for a supersized 100bps hike in July. However, markets shrugged off the numbers after the central bank signaled its intent to stick with 75 basis points.

SEC Probes Coinbase

Crypto markets traded lower on Monday as investors digested the news that Coinbase, the largest US crypto exchange, is reportedly being investigated by the U.S. Securities and Exchange Commission over whether it facilitated the trading of unregistered securities. Shares in Coinbase, which has a market value of almost $15B, fell 5.3% on Monday. The story was first reported by Bloomberg.

Ether has skidded 6.6% in the last 24 hours in early morning trading U.K. time, and Bitcoin has dropped 3.7%, to $21,098.

Ether has continued to outperform and the ETH/BTC ratio stands near recent highs at 0.0675. The supply of ETH held on centralized exchanges has fallen to a 4-year low ahead of The Merge, Ethereum’s transition to proof-of-stake, that’s now expected to take place in September.

Traders don’t seem to have piled on the leverage during Ether’s recent rally, according to liquidation price data from Parsec for the major DeFi lending protocols.

This could indicate that traders remain skeptical of this rally, and are unwilling to add leverage after the carnage in June caused by the collapse of crypto hedge fund Three Arrows Capital.