Federal Reserve’s Rate Hike Hint Sends Cryptos Crashing
Mumbai: Cryptocurrencies, including bitcoin, Etherea, Solana, Cardano and Terra, fell sharply on Wednesday night after the US Federal Reserve issued a December meeting where the central bank indicated it would start raising interest rates to deal with high inflation.
Bitcoin fell 8.49% to $ 42,835 on Thursday at 5:00 p.m. She previously tested the $ 42,500 level, then the Fed released its records.
Bitcoin reached a very high of $ 68,749 on November 11, 2021 and outperformed all capital markets in terms of annual price growth in 2021 with a return of 60%.
Other alt-coins also reacted strongly to the news: Ethereum, Cardano, Solano, Shiba Inu, Cardano and Binance Coin all fell by 10% or more within 48 hours by Thursday night. At 5 p.m., the Coinbase tracker showed a 9.80% decline in the overall crypto market over the past 24 hours.
Bitcoin has been under pressure recently as large central banks suggest that they are moving away from low interest rates and that their bond-buying programs are slowly slowing down.
Experts say the decline is expected because the market has been tense and very fast in recent days.
"The market downturn is largely due to the US Federal Reserve's plan to raise interest rates this year to cope with rising inflation. As with any asset, cryptocurrencies will be affected by macroeconomic factors. Investors need to remember that risk and reward go hand in hand and that they need to do their own research before buying assets - not just cryptocurrencies, "said Ashish Singhal, founder and CEO of Coin Switch.
Experts say selling pressure is largely due to US and European investors reserving profits. "Correction is approaching, since December 16, the market has been tied up and is changing.