Breaking News
Investing Pro 0
Cyber Monday Extended SALE: Up to 60% OFF InvestingPro+ CLAIM OFFER

Bitcoin Falls Below $20K, Crypto Slumps as Fed Rate Risks Rise

Cryptocurrency Aug 29, 2022 00:48
Saved. See Saved Items.
This article has already been saved in your Saved Items
 
© Reuters
 
DXY
-0.05%
Add to/Remove from a Portfolio
Add to Watchlist
Add Position

Position added successfully to:

Please name your holdings portfolio
 
BTC/USD
-1.20%
Add to/Remove from a Portfolio
Add to Watchlist
Add Position

Position added successfully to:

Please name your holdings portfolio
 
ETH/USD
-0.96%
Add to/Remove from a Portfolio
Add to Watchlist
Add Position

Position added successfully to:

Please name your holdings portfolio
 

By Ambar Warrick

Investing.com-- Bitcoin fell below the key $20,000 level on Monday, helming a tumble in crypto prices after Federal Reserve Chair Jerome Powell struck a hawkish tone on the path of U.S. monetary policy.

Prices of the Bitcoin (BitfinexUSD) fell 0.8% over the past 24 hours to $19,882. The token slumped nearly 8% over the past seven days. Ethereum, the world’s second-largest crypto, fell nearly 2% in the past 24 hours to $1,465, while total crypto market capitalization fell below $1 trillion.

Losses in crypto prices mirror those seen in most risk-driven markets, after the Fed’s Powell dismissed any notion of a dovish pivot by the central bank. Instead, the Chair warned that U.S. households and businesses will have to contend with steep rises in interest rates until inflation is brought under control.

His comments triggered sharp losses in stock markets on Friday, with the Nasdaq 100 index - crypto’s closest analog in the equity market - tumbling over 4%.

The Fed raised interest rates four times this year, quickly reversing the easy monetary policy enjoyed by crypto and risk-driven markets over the past two years. With a majority of traders now forecasting a 75 basis-point rate hike by the Fed in September, crypto’s losses are expected to persist.

Increased borrowing costs, coupled with rising inflation limit the amount of funds that can be invested into speculative assets such as crypto. Technology stocks - which had also ridden loose monetary policy to record highs - are expected to see a similar decline in investment.

Bitcoin has slumped over 60% from a record high hit in November 2021, and lost over half of its value in 2022. The Nasdaq 100 is down nearly 24% so far this year.

The U.S. dollar benefited the most from the Fed’s hawkish signals, rising 0.3% to close to a 20-year high on Monday. U.S. Treasury yields also traded at elevated levels.

Bitcoin Falls Below $20K, Crypto Slumps as Fed Rate Risks Rise
 

Related Articles

Add a Comment

Comment Guidelines

We encourage you to use comments to engage with users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind: 

  • Enrich the conversation
  • Stay focused and on track. Only post material that’s relevant to the topic being discussed.
  • Be respectful. Even negative opinions can be framed positively and diplomatically.
  •  Use standard writing style. Include punctuation and upper and lower cases.
  • NOTE: Spam and/or promotional messages and links within a comment will be removed
  • Avoid profanity, slander or personal attacks directed at an author or another user.
  • Don’t Monopolize the Conversation. We appreciate passion and conviction, but we also believe strongly in giving everyone a chance to air their thoughts. Therefore, in addition to civil interaction, we expect commenters to offer their opinions succinctly and thoughtfully, but not so repeatedly that others are annoyed or offended. If we receive complaints about individuals who take over a thread or forum, we reserve the right to ban them from the site, without recourse.
  • Only English comments will be allowed.

Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at Investing.com’s discretion.

Write your thoughts here
 
Are you sure you want to delete this chart?
 
Post
Post also to:
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Thanks for your comment. Please note that all comments are pending until approved by our moderators. It may therefore take some time before it appears on our website.
 
Are you sure you want to delete this chart?
 
Post
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Add Chart to Comment
Confirm Block

Are you sure you want to block %USER_NAME%?

By doing so, you and %USER_NAME% will not be able to see any of each other's Investing.com's posts.

%USER_NAME% was successfully added to your Block List

Since you’ve just unblocked this person, you must wait 48 hours before renewing the block.

Report this comment

I feel that this comment is:

Comment flagged

Thank You!

Your report has been sent to our moderators for review
Continue with Google
or
Sign up with Email