Bitcoin (BTC) and other cryptocurrencies fall due to minutes of the Fed’s hawkish meeting

In this illustration taken on May 19, 2021, the virtual currency Bitcoin can be seen in front of the stock chart.

Dado Luvić | Reuters

Bitcoin As the hawkish minutes of the Fed’s December meeting hit global risk assets, other cryptocurrencies and other cryptocurrencies fell sharply on Thursday.

According to data from Coin Metrics, the transaction price of Bitcoin is $42,739.52, a drop of more than 7% from the previous 24 hours. In the past 24 hours, it fell to $42,503.88, the lowest level in more than a month.

Other cryptocurrencies also fell. Ethereum Fell nearly 12% to $3,335.99, while Solana It fell 12% to US$146.84.

The cryptocurrency sell-off occurred after the stock market fell on Wednesday Release of minutes of the Fed’s December meeting The central bank stated in it that it will reduce its supporting monetary policy, including reducing the number of bonds it holds.

The Fed also stated that it may have to raise interest rates sooner than expected.

At the same time, the benchmark 10-year treasury The yield rose to more than 1.7% on Wednesday.

When interest rates rise, growth assets such as technology stocks are often hit, because when yields rise, the attractiveness of future returns to investors will decrease. This sentiment has penetrated into cryptocurrencies that are considered riskier assets.

“Overall, given the Fed’s recent interest rate hikes, I think the global market has shown weakness. Therefore, I do think that yesterday’s decline is quite relevant. We saw a decline in the U.S. market yesterday, so everything else, including crypto, The performance of risky asset classes within the cryptocurrency exchange is equally bad,” said Vijay Ayyar, vice president of corporate development and international at Luno, a cryptocurrency exchange.

“Especially in terms of Bitcoin and cryptocurrencies, due to lack of interest/demand, holidays and potential similar factors, price movements in the past 4 weeks have been somewhat weak.”

Shares Europe and Asia Pacific It also fell on Thursday.

Yuya Hasegawa, a crypto market analyst at Japan’s Bitcoin exchange Bitbank, said that if the upcoming December non-agricultural employment data shows strong employment growth, Bitcoin may fall further and may fall to $40,000.

Hasegawa said in an email on Thursday: “It is expected that downward pressure on prices will continue until the market fully digests future monetary policies that are tighter than expected.”

Ryan Browne and Eustance Huang of CNBC contributed to this report.

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