Things are going from bad to worse for cryptocurrency holders, as the price of bitcoin and the major tokens plummeted overnight.
Things are going from bad to worse for cryptocurrency holders, with bitcoin and major token prices dropping overnight – after already testing for two weeks.
The price of Bitcoin lost thousands of dollars in a matter of hours, dropping from over $47,000 per bitcoin to less than $44,000 this morning.
Bitcoin is now down nearly 40 percent from its high of $70,000 set in November – and almost all other digital coins are following a bearish trend.
Prices on Coindesk this morning show that other tokens such as ether, XRP, cardano and solana took massive losses overnight – losing 3-5 percent and wiping billions of dollars from the combined value of the $2.1 trillion crypto market.
Cryptocurrency prices fell along with stock markets after the US Federal Reserve released meeting minutes indicating that officials were ready to raise interest rates sooner than expected next year with inflation rising.
Sentiment turned sharp after the Federal Reserve released a report on its December policy meeting which showed central bankers saying that “a hike in the fed funds rate may be warranted sooner or at a faster pace than participants had anticipated earlier.”
Markets rallied during the Covid-19 pandemic after the Federal Reserve cut interest rates to zero, and the tech sector especially thrived from easy money policies.
While Fed officials forecast last month that they expect up to three interest rate increases in 2022, the minutes showed they are ready to act more aggressively to combat inflation, which could tighten corporate terms.
Bitcoin dominance can be ended
Although almost all cryptocurrencies have stagnated over the past month, there are signs that the end of Bitcoin’s dominance is nearing.
Coindesk reports that Ethereum, the second largest cryptocurrency by market capitalization, is about 50 percent away from overtaking Bitcoin as the largest cryptocurrency.
Some analysts are referring to the battle over cryptocurrency as “volatility.” Over the past year, ether has been gaining ground against bitcoin across many metrics, including active addresses, Google search interests, and the number of transactions.