It was another day of disappointment for crypto investors with the top crypto assets values tanking. Bitcoin (BTC) Ethereum (ETH) and Dogecoin (DOGE) all were affected by the bearish trend. When reports last came in the number one crypto currency was changing hands at $23,379.13, down by 4.05% over the last 24 hours. ETH was trading at $1,845 and DOGE was trading at $0.082021. The former tanked by 5.11% while the latter by 6.78% respectively.
Wall Street Closely Linked To Crypto Fortunes
The crypto fortunes are closely linked to the economic indices and a dismal performance of the U.S. economy and the hawkish investors are digesting the just released minutes of the July meeting by the Federal Reserve on Wednesday. With inflation still very much reality investors are fearing another round interest hike by the U.S. Central Bank. Investors hesitation can also be blamed on comments by Fed officials who are hinting of harsher monetary measures quite contrary to the market prediction which expected the Fed to put brakes or even reverse the rate hikes.
Fed Interest Hike Fear Leads To US Indices Closing Lower
Major Exchanges were down with S&P 500 closing lower at 4,274.04 points, the Dow Jones tanked 0.5% at 33,980.32 points, while the tech-heavy NASDAQ Composite also tanked 1.25% lower at 12,938.12 points.
BTC, ETH and DOGE fortunes are closely linked to the price movement of global equities. The treasury yields were high and the fear of another round of interest hike reigned supreme. The rising yields of bonds have an effect on the more volatile assets including crypto currencies.
Investors Shift Towards Low-Risk Assets As Interest Hike Probable
The crypto currency sector is a very volatile market and investment in cryptocurrencies are labelled as the riskiest investments. The investors are therefore shifting their attention to less riskier assets and doing the wait and watch approach. Everything now depends upon the Fed policy to tackle inflation.
A hike in interest rate will impact negatively on the high-risk investments like the cryptocurrencies. In the past it is seen that relaxation in interest rates precipitated by the Coronavirus pandemic had fueled bullish trends in the Crypto sector.