Bitcoin, Ether Extend Crypto Selloff as Big Fed Rate Hike Looms

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(Bloomberg) — Cryp­tocur­ren­cies extend­ed a slide on Mon­day, ham­pered by a fur­ther drop in the sec­ond-largest token Ether as well as the prospect of a glob­al wave of mon­e­tary tight­en­ing this week span­ning the US to Europe.

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Ether fell as much as 5.6% to a two-month low and was trad­ing around $1,302 as of 10:35 a.m. in Sin­ga­pore, while Bit­coin shed about 5% to recede below $19,000. Tokens like XRP, Avalanche and Polka­dot post­ed heav­ier losses.

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An Ether jump since mid-June that was spurred by hype around an upgrade of the Ethereum blockchain is rapid­ly unwind­ing now the revamp is done. Mean­while, investors are brac­ing for volatil­i­ty from the jum­bo inter­est-rate hike expect­ed this week from the Fed­er­al Reserve to fight price pressures.

The Ethereum update — the Merge — to slash ener­gy usage is a “ginor­mous shift” but “in this infla­tion­ary envi­ron­ment macro trumps every­thing,” Antoni Trenchev, man­ag­ing part­ner at cryp­to lender Nexo, wrote in a note.

That’s evi­dent in the pres­sure on a range of assets: glob­al stocks are clos­er to wip­ing out a climb since mid-June that for many was a bear-mar­ket ral­ly. US equi­ty futures were in the red Mon­day, while a dol­lar gauge pushed higher.

Else­where, reports that Rip­ple Labs Inc. and the US Secu­ri­ties & Exchange Com­mis­sion are seek­ing an imme­di­ate rul­ing in a court case over Ripple’s affil­i­at­ed token XRP saw the lat­ter shed as much as 12%. The SEC argues Rip­ple was “reck­less” in its claims that XRP isn’t a reg­u­lat­ed security.

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