Feds Expect To Raise Interest Rates Again As The Cryptocurrency Market Plummets.

With the Federal Open Market Committee (FOMC) meeting on Wednesday, some analysts predict that the committee would hike interest rates aggressively to tackle increasing inflation.

According to Reuters, inflation hit a 40-year high of 6.6% in March, which is three times the Federal Reserve’s target. The Fed is likely to raise interest rates by a half-point at each of its next three sessions, based on this pattern.

Others who are concerned about rising inflation include ING Group, a Dutch multinational banking and financial services organization, whose chief international economist James Knightley predicted a jump of 50 basis points on Wednesday in a study.

According to the report, “inflation worries outweigh temporary GDP dip.” Fed’s interest rate hike speculation has had a significant impact on all areas of the economy, with the stock and cryptocurrency markets performing poorly.

The stock market had its worst month since March 2020 in April, with the S&P 500 shedding 8.8%, the Nasdaq 13.3%, and the Dow 4.9%. In the end, the Nasdaq has had its worst four-month start in more than 50 years.

The performance is similar to that of the crypto industry, whose market cap has been steadily declining over the same time period. The crypto space had a market valuation of more than $2 trillion at the beginning of the month, but it ended up around $1.7 trillion.

Bitcoin and Ethereum, two of the most popular digital assets, have also had their prices fall by 16.4% and 15.8%, respectively.

ApeCoin’s price soared prior to the launch of BAYC’s Otherside mint, despite the fact that it had lost 24% of its value in the previous 24 hours.

The association between the performance of crypto and the stock market demonstrates that the bigger financial world is diving further into the business. Bitcoin’s 30-day correlation with big tech stocks has surged to levels last seen in July 2020, while its correction to gold has plummeted to new lows.

Unlike BTC, however, GOLD has performed admirably. According to Bitfinex market analysts, the crypto industry is currently experiencing FUD similar to the bear market sentiments of 2018.

DISCLAIMER: The Information on this website is provided as general market commentary and does not constitute investment advice. We encourage you to do your own research before investing.

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Patrick

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