Jerome Powell, Chairman of the Federal Reserve, talked tough consecutively for the second day, as banking giant JP Morgan has ended its relationship with cryptocurrency exchange Gemini, Ian Allison at Coindesk reported. However, crypto-friendly bank Silvergate will shutter further operations.
In the last 24 hours, the largest cryptocurrency by market capitalization was traded at about $21,750, which is estimated to be down more than 2%. On the other hand, Bitcoin sank below $21,600 at one point after largely stumbling over $22,000 for the following month.
Moreover, market investors have been wrestling with daunting jobs and price values, which has prompted Powell and Fed governors to revitalise their monetary aggressiveness as an inflation measure.
It was also noticed that the anticipation of a 50 basis point (bps) surge in the interest rate has now rested at about 70% after heavily favouring a neutral 25 bps increase in previous weeks.
Quinn Thompson, head of growth and capital markets at Maple, wrote an email to Coindesk stating, “After celebrating disinflation greenshoots the past two months, the Federal Reserve has had to restart its hawkish positioning by talking tough on rate hikes.”
“I think it’s interesting to note that they were parading their hikes as having a substantial impact on inflation, and then it became clear that inflation has proved to be more stubborn than had been anticipated. A 50-basis-point rate hike is basically inevitable now,” he added.
Thompson further stated that “barring any breakage in the system, such as a credit event of some sort, it seems increasingly likely that there won’t be any rate cuts until next year.”
Similar to bitcoin, Ether advanced and experienced a small decline of around 2% to trade slightly around $1,530. That level was spun off as its late-February highs, which were over $1,700. In contrast, other major cryptos were mostly down, with SOL, the Solana blockchain, down more than 9% and APT, the native cryptocurrency of layer 1 blockchain, Aptos Labs, down more than 6%.
The CoinDesk Market Index, a measure of the wider crypto market’s performance, was down around 3%.
However, for a certain period of time, the Nikkei surged about 0.5% as trading in Asian equity markets unfurled. Although U.S. indexes were flat with an intricate Nasdaq and S&P 500, which have an ubiquitous technology component, which is uplifting slightly, the Dow Jones Industrial Average (DJIA) has been declining a couple of mites of a percentage point.
Looking at the market conditions, Thompson was cautious about the cryptocurrency prospects over the Fed’s apparent intrusive turn, which has historically sent prices of crypto and other riskier assets plummeting.
“I suspect that we could again test the lows that were reached last year as a result of hiked rates, but also because of the Fed’s ongoing monetary tightening regime that is draining liquidity out of the markets,” Thompson wrote.
“A lot of this tightened monetary policy is being priced into the fixed income markets. But risk assets have yet to price in the potential for downside spillover, and this could spell trouble for equities and crypto,” he gauged.
- Published By Team Genuine Reporter