The value of Bitcoin, Ethereum and other major cryptocurrencies plummeted on Thursday minutes after the last meeting of the Federal Reserve, indicating a potential shift toward more aggressive action from the bank as it cuts pandemic support and moves to tackle high inflation levels.
The price of Bitcoin, the most valuable cryptocurrency by market capitalization, fell to just under $43,000 Thursday morning, down nearly 8% from 24 hours earlier, according to CoinGecko.
Ethereum, the second most valuable cryptocurrency by market cap, was trading around $3,300, down 12% from 24 hours earlier.
Other coins – including Binance’s XRP, BNB, cardano, and solana – have experienced similar sharp declines over the past 24 hours, losing between 10% and 13%.
The losses come amid a broader sell-off that has wiped out billions of dollars in value from the cryptocurrency market, which is now worth about $2.14 trillion, according to CoinGecko, down 10% from the previous day.
The crypto sale comes after minutes from the Federal Reserve’s December meeting signaled a possible shift toward more aggressive policies to manage inflation and end pandemic support. Stock markets fell after the release and the Nasdaq posted its biggest daily drop since February (3.3%).
What to watch
Large-scale unrest in Kazakhstan – initially spurred by high fuel prices – could seep in and destabilize crypto markets. As of August (the most recent data available), it accounts for 18% of the bitcoin hash rate – a measure of the computing power of the mining network – according to the Cambridge Center for Alternative Finance. The Central Asian country is second only to the United States in terms of bitcoin mining, according to the data, and rising energy costs, policy changes or turmoil could disrupt the market.
Stocks drop after Fed Minutes showed the central bank can remove more stimulus (Forbes)
News of Kazakhstan experiencing internet outages as oil-rich nation erupts in rare anti-government protests (Forbes)