At one point during the day, Bitcoin was trading at $18,538, down 3.7%. As of 3:31 pm (Korea time), Bitcoin traded at $19,110.04, down 1.31% from 24 hours ago, recovering to the $19,000 level, but the volatility trend continues.
Ethereum was trading at $1,262, a 4.7% drop during the day. The index, which reflects the price of the top 100 cryptocurrencies, also fell 1.6%.
Investors are moving out of risky assets as the Fed continues to tighten aggressively to contain inflation, Bloomberg reported.
Earlier, the Federal Open Market Committee (FOMC) held a regular meeting in September to raise the benchmark interest rate by 0.75 percentage points to 3.0-3.25%. In addition, through a dot chart containing the prospects for the Fed’s rate hike path, the base rate estimates for this year and the end of next year are presented at 4.4% and 4.6%. This is significantly higher than the 3.4% and 3.7% estimates presented in June, suggesting that the Fed’s stance has become more hawkish.
On the New York Stock Exchange, the Dow Jones Industrial Average closed at 29,590.41, down 486.27 points (1.62%) from the previous day, breaking the 30,000 line. The Nasdaq index, which focuses on tech stocks following the movement of Bitcoin, closed at 18,67.93, down 198.88 points (1.80%) from the battlefield.
Risky assets will take a hit as Fed Chairman Jerome Powell said he would continue raising interest rates until inflation is suppressed, Bloomberg said. There are many predictions that the Fed will raise rates by 0.75 percentage points at least once at the next two FOMC meetings within the year. This could lead to a steeper decline in cryptocurrency prices.
“It will be a tough environment for the cryptocurrency market,” said Chris Gaffney, head of World Market at TIAA Bank.
“The macro environment is putting pressure on both cryptocurrencies and equities as the Fed is still tightening to keep inflation down,” BlockFi said in a report.
Controversy over the decline in cryptocurrency prices continues. Some experts argue that the price of Bitcoin could drop significantly this year to around $10,000.
Andy Long, CEO of Swiss-based White Rock Management, said: told Time magazine.
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