Tough environment for cryptocurrency… Bitcoin falls to $13,000

Bloomberg News reported on the 23rd (local time) that the sudden drop in the price of cryptocurrencies such as Bitcoin will be sharpened by the intense tightening of the Federal Reserve (Fed).

At one point during the day, Bitcoin was trading at $18,538, down 3.7%. As of 3:31 pm (Korea time), Bitcoin was trading at $19,110.04, down 1.31% from 24 hours ago, recovering to the $19,000 level, but the volatility trend continues.

Ethereum was trading at $1,262, down 4.7% on the day. The index, which reflects the price of the top 100 cryptocurrencies, has also decreased by 1.6%.

Investors are moving out of risky assets as the Fed continues to tighten aggressively to contain inflation, Bloomberg reported.

Earlier, the Federal Open Market Committee (FOMC) held a regular meeting in September to raise the benchmark interest rate by 0.75 percentage points to 3.0-3.25%. In addition, through a dot chart containing the forecasts for the Fed’s rate hike path, the base rate estimates for this year and the end of next year are presented at 4.4% and 4.6%. This is significantly higher than the 3.4% and 3.7% estimates presented in June, which suggests that the Fed’s stance has become more hawkish.

On the New York Stock Exchange, the Dow Jones Industrial Average closed at 29,590.41, down 486.27 points (1.62%) from the previous day, breaking the 30,000 line. The Nasdaq index, which focuses on technology stocks following Bitcoin’s move, closed at 18,67.93, down 198.88 points (1.80%) from the battlefield.

Risky assets will be hit as Fed Chairman Jerome Powell said he would continue to raise interest rates until inflation is contained, Bloomberg said. There are many predictions that the Fed will raise rates by 0.75 percentage points at least once at the next two FOMC meetings within the year. This could lead to a steeper drop in cryptocurrency prices.

“It will be a difficult environment for the cryptocurrency market,” said Chris Gaffney, head of Global Markets at TIAA Bank.

“The macro environment is weighing on cryptocurrencies and equities as the Fed continues to tighten to keep inflation down,” BlockFi said in a report.

Controversy surrounding the drop in cryptocurrency prices continues. Some experts argue that the price of Bitcoin could drop significantly this year to around $10,000.

Andy Long, CEO of Swiss-based White Rock Management: told Time magazine.