Bitcoin plummeted for the fourth day in a row as investors shied away from riskier assets in anticipation of the largest jump in US interest rates in three decades.
The connection coefficient between bitcoin and U.S. equities has increased in the last 90 days as investors grow more risk-averse as the Federal Reserve reduces the pandemic-era stimulus that supported bitcoin.
Ether, XRP, Litercoin fell more than bitcoin
In Asian morning trade, the biggest cryptocurrency by market capitalization dipped below $43,000 for the first time since March 24. Bitcoin has lost around 7.4% of its value this year. The drop in digital assets mirrored a wider sell-off in stocks, with Japan’s Nikkei index falling 1.8 percent.
The Ural cryptocurrencies’ price swings are even greater because of their lower market value and lower trading volume, which leads to stronger price swings. In the previous five days, Cordano had lost 9.1%, while Solana had lost 9.4%.
According to billionaire crypto investor Michael Novogratz, Bitcoin might start to take off again as soon as the US Federal Reserve takes a holiday.
Due to strong inflation, the central bank will stay hawkish for a while and will likely hike interest rates by 50 basis points shortly, said Novogratz. However, when the economy slows and the Fed retreats, bitcoin flies to the moon.