The digital currency falls to its lowest level since last August. Reason: The US central bank could soon react to the high inflation with rate hikes.
The prospect of a much tighter monetary policy in the USA is increasingly weighing on digital currencies such as Bitcoin.
On Friday, the oldest and largest crypto asset by market value fell to its lowest level since last August. In the meantime, 38,259 US dollars have been marked on the Bitstamp trading platform. The day before, the course was still well over $43,000.
Other digital stocks also fell sharply in some cases. Ethereum, the second largest cryptocurrency by market value, fell about eight percent to trade well below the $3,000 mark. The value of all around 17,000 cryptocurrencies is currently around $1.8 trillion. That’s a good trillion fewer than two months ago. A record value of around $2.9 trillion was marked in November.
US monetary policy weighs on risky assets
US monetary policy is currently a significant burden for risky investments such as digital assets. It is expected that the US Federal Reserve will soon react to the high inflation by raising interest rates. The Fed itself has so far signaled three hikes for this year, and four tightening steps are expected on the financial markets.
Rising interest rates are usually poison for risky asset classes, which include Bitcoin and other cryptocurrencies due to their sometimes extreme price fluctuations.
Source From: Stern
Jane Stock is a technology author, who has written for 24 Hours World. She writes about the latest in technology news and trends, and is always on the lookout for new and innovative ways to improve his audience’s experience.
