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A Fed Hike Sends Bitcoin to Its Lowest Level Since 2020

Bitcoin Drops for the Second Consecutive Day in 2023

With a wave of monetary tightening sweeping from Europe to the US this week, cryptocurrencies plunged on Monday, with Bitcoin nearing its lowest level since 2020.

The biggest digital token was selling for $18,370 at 7:45 am today in London, a drop of 7.4%. Despite maintaining the $1,300 level, Ether dropped as much as 6.6%. Polkadot and XRP suffered the biggest losses.

Investors are preparing for volatility as the Federal Reserve prepares to raise interest rates to combat inflation concerns on Wednesday. The crypto industry is losing liquidity due to higher borrowing charges. The US equity futures market declined, while the dollar measure increased due to increased caution.

According to Antoni Trenchev, managing partner of cryptocurrency lender Nexo, macro outweighs everything in this inflationary environment.

How are other tokens performing?

The second-largest token, ether, has fallen to its lowest level in two months. Due to buzz about an upgrade to “The Merge” so Ethereum blockchain would reduce energy use, the price of the crypto has increased since mid-June.

Ethereum’s redesign resulted in an extra token for investors. Blockchain’s historical computing activities are represented in the EthereumPOW branch, which declined to participate in the software upgrade. According to CoinGecko, the decline was 40%.

A major loser was the Ripple Labs Inc.-affiliated XRP cryptocurrency, which fell as much as 13.5%. XRP is being accused of being “reckless” in asserting that it isn’t regulated by the US Securities and Exchange Commission.

Digital tokens’ market values have fallen by about $70 billion over the past 24 hours, to $941 billion, down from $3 trillion at their high in 2021. A tightening of financial conditions and dramatic failures at leveraged crypto businesses led to this year’s price collapse.


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