Cryptocurrencies crash as interest rates rise; bitcoin down 20% YTD
Bitcoin has slipped 20% since the start of 2022 and continues to be volatile. Bitcoin was last seen trading at $34,400 while ethereum, the second most traded cryptocurrency slipped 4.8% to $2,545. Dogecoin was down 1.2% at $0.12 while Shiba Inu was down 4.9% to $0.00001887
(Representational image) Cryptocurrencies crash amid unfavourable market conditions
Photo : AP
Bitcoin and other crypto tokens, touted as a hedge against economic downturn and market fall, are crashing in tandem with stocks as central banks raise interest rates. On Sunday, bitcoin witnessed another bout of crash, slipping below $35,000. The global cryptocurrency market slumped 4.5% in the past 24 hours to $1.66 trillion.
Cryptocurrencies came under pressure after global central banks began raising interest rates to rein in rapid inflation.
Bitcoin has slipped 20% since the start of 2022 and continues to be volatile. Bitcoin was last seen trading at $34,400 while ethereum, the second most traded cryptocurrency slipped 4.8% to $2,545. Dogecoin was down 1.2% at $0.12 while Shiba Inu was down 4.9% to $0.00001887.
Other heavy traded digital tokens also crashed: Solana, Polkadot, Cardano, Uniswap, Terra, Avalanche, Litecoin, Polygon, Tron, Stellar trade with cut of 2-4% over the last 24 hours.
The Reserve Bank of India raised repo rate by 40 basis points to 4.40% earlier this week. Last week US Federal Open Market Committee (FOMC) raised interest rates by 0.5%, making its biggest upward revision in over two decades.
Bitcoin has called 40% since US Federal Reserve laid bare plans to raise interest rates last November marking an end of an era of easy liquidity.
Bitcoin slipped 17% during the month of April, making it the worst monthly performer this year.
Investors are seeking refuge in less risky assets as global market conditions remain bogged down by rising interest rates, supply-side concerns, and geopolitical risks.
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