$100 billion missing from the crypto market because of the economic crisis threat
More than $100 billion was lost from the crypto market amid rising inflation in the U.S. and the Fed's policy of rate hikes.
Right now, Bitcoin is at its lowest since the end of 2020 - the cryptocurrency has dropped to $24,000. Ethereum has collapsed to $1200, which is 74.5 % below its record high of about $4900 set in November 2021. Meanwhile, Dogecoin, TRON, and Avalanche are down 17.4%, 15.6%, and 19.7%, respectively, in the last 24 hours. Such a trend indicates that the cryptocurrency market is including the threat of an economic crisis in prices. A sharp drop in the cryptocurrency value may discourage investors from further investment.
It is worth noting that in recent months, the crypto market has shown a significant correlation with traditional stock markets. Cryptocurrency prices dropped along with the S&P 500 Index, which lost 2.9 percent on Friday, and the Nasdaq, which fell by 3.5 percent.
Investors expect the Federal Reserve to raise interest rates next week. Earlier this week, Treasury Secretary Janet Yellen warned about including cryptocurrency in 401(k) plans, boosting the bearish forecast even further.
Initially, investors had factored a 50-basis point rate hike into prices, but a recent report on the Consumer Price Index has forced them to revise their forecasts. There is also a risk that the Fed could take more aggressive action, thereby provoking an economic crisis.
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