Fed's Rate Hike Signal Sends Bitcoin, Ethereum Into Tailspin

Cryptocurrencies faced a downturn on Thursday, influenced by growing worries about the U.S. economic landscape.

Bitcoin's BTC/USD value decreased by roughly 4.3% over the past 24 hours, trading at $27,770 levels, as per data from CoinGecko.

This decline was triggered following the disclosure of the Federal Reserve's July meeting minutes.

The minutes from the Federal Reserve's July gathering indicated that officials are wary of "upside risks" to inflation, which might result in additional rate increases.

During this session, the Fed escalated its primary interest rate, marking the steepest rise in over two decades.

Contrary to expectations, financial markets had anticipated that the central bank would refrain from further interest rate adjustments this year.

Consequently, the stock market experienced a decline for two consecutive days, and the 10-year U.S. Treasury yield reached its peak in 2008.

Despite Bitcoin's current low correlation with the stock market, as noted by Coin Metrics, it reached a record high in 2022, reacting to the Federal Reserve's strategy to control inflation.

Recent data from Kaiko highlighted that the 90-day volatility for both Bitcoin and Ethereum ETH/USD has decreased to multi-year lows, standing at 35% and 37%, respectively.

Meanwhile, other major cryptocurrencies like Binance Coin BNB/USD, Ripple XRP/USD, Cardano ADA/USD, Solana SOL/USD and Dogecoin DOGE/USD were trading down about 4.1%, 3.6%, 1.2%, and 5.6%, respectively. 

Following technical issues surrounding the launch of the Layer 2 network Shibarium, its Shiba Unu SHIB/USD is trading down 10.5%, while Shibarium governance tokens BONE/USD and LEASH/USD were trading down 18% and 20% respectively.

Read Next: Hackers From North Korea Stole Over $180M In Crypto Within 6 Months: Report

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