The Federal Reserve is worried that a sudden $100 billion crypto market crash today.

crypto market crash today

After U.S. Treasury Secretary Janet Yellen delivered a strong crypto warning, BitcoinBTC-18.1 percent, Ethereum, and other major cryptocurrencies fell this weekend, wiping out more than $100 billion from the combined crypto market.

The price of bitcoin has fallen to roughly $27,000 per bitcoin, its lowest level since late 2020, while the price of Ethereum has plummeted to under $1,500 per ether. BNB -17.5 percent, Solana, Cardano, XRP-14.5 percent, Dogecoin, Tron, and Avalanche have all had double-digit percentage drops in the previous 24 hours.

After the latest U.S. consumer price index data showed that the economy is still roaring, people thought that the Federal Reserve would “put its foot on the throttle” to fight inflation. This caused bitcoin and other cryptocurrencies to drop in price.

After the latest inflation data came out, crypto investor and influencer Anthony Pompliano wrote in an email, “The Federal Reserve is now in a corner.”

Prices in the United States grew faster than predicted in May, climbing to 8.6% after dropping in April, pushed by rising energy and food costs and driving inflation to its highest level since 1981, according to statistics released on Friday.

“Despite the Fed’s interest rate hikes and quantitative tightening, inflation has remained stubbornly high.” They don’t have many options other than to push their foot down on the accelerator. The Fed may aim to speed up interest rate hikes, both in terms of speed and severity, as well as quantitative tightening. I’m not sure they’ll go through with it, but there aren’t many other options.

The Fed is expected to raise interest rates to 1.25 percent-1.50 percent next week, following a similar move last month. According to a Reuters poll, economists expect another 50 basis point rate hike in July.

In an emailed comment, Alex Kuptsikevich, senior market analyst at FxPro, stated, “Friday’s inflation number is the last important release before the Fed meeting next Wednesday.” The public’s attention will be drawn to the weekend if inflation rises to 40-year highs, putting pressure on the Fed. Such a high reading could perhaps lead to a stronger Fed stance in the accompanying comments. “

Over the last six months, the bitcoin, Ethereum, and crypto markets have been slowly declining, collapsing alongside the stock market as the Federal Reserve and other central banks across the world raise interest rates and begin to reduce pandemic-era stimulus policies. The Federal Reserve began the long process of quantitative tightening or decreasing its bloated $9 trillion balance sheet, earlier this month.

“Bitcoin’s continued correlation with stock markets roiled by macro-forces has snuffed optimism and sparked frustration at a time when crypto appears to be missing the perfect opportunity to demonstrate its forgotten role as an inflation hedge,” Rich Blake, a financial consultant at crypto platform Uphold, wrote in emailed comments.

“As global monetary tightening accelerates, equities are still vulnerable to lower lows in the short run, indicating telltale signals of a cyclical bear market.”

Leave a Reply

Your email address will not be published. Required fields are marked *