Bitcoin Prices Tumbling as Cryptos Pressured by Hawkish Fed

Bitcoin and other cryptocurrencies lost ground on Friday, giving up gains made earlier in the week as macroeconomic concerns roiled the stock market.

Bitcoin was down more than 4% in the last 24 hours, but it was still trading above $40,000. The drop comes after a recent spike in which prices for the most popular cryptocurrency plummeted below $39,000 on Monday before soaring as high as near $43,000 on Thursday.

The boat was then rocked by remarks from Federal Reserve Chair Jerome Powell.

Bitcoin and its equivalents should theoretically trade independently of traditional financial markets, but they have been shown to be connected with other risky assets, particularly tech stocks. Stocks also dipped on Thursday as Powell said that the Federal Reserve would likely hike interest rates by a half-point at its May meeting.

Tighter monetary policy and higher interest rates will raise the cost of borrowing, which is expected to impact investor sentiment on riskier assets.

 Yuya Hasegawa, an analyst at crypto exchange Bitbank, said:

“Bitcoin was rejected at $43,000 on Thursday as the U.S. stock market slid on the Fed Chair’s hawkish comment,”

Ether, Bitcoin’s smaller peer, also declined, dropping more than 4% and hovering around $3,000. The Ethereum blockchain network’s native token hit $3,150 on Thursday, following a rise that carried it from below $2,900 in late Monday trade.

Smaller cryptocurrencies, known as “altcoins,” were also struggling. Solana was down 6%, Luna 2%, and Cardano 4%. Dogecoin and shiba inu, both down more than 3%, were among the “memecoins,” so called because they were originally meant as internet jokes rather than serious blockchain initiatives.

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Patrick

CoinCu News