Although attitude remained cautious in light of the Federal Reserve’s warning that the economy will suffer as a result of tighter policies, cryptocurrency price falls following another significant interest rate rise were somewhat reversed. The biggest token, bitcoin, was down approximately 1% as of 5:20 a.m. in London on Thursday after falling as much as 4% earlier. These values were last seen in 2020. Ether, the second-largest coin, continues to underperform, losing more than 3%.
The Fed’s intention to battle inflation by tightening banking conditions has the markets trembling. Bond curve inversion, which is viewed as a harbinger of a coming recession, deepened when shorter maturity Treasury yields increased more than longer tenor rates. As investors looked for a safe haven, the dollar gauge reached a record high.
Such a setting provides little solace for the cryptocurrency markets. They were already hurting from a $2 trillion decline from a record high in 2021, an unravelling punctuated by failures like the Terraform Labs project, whose co-founder Do Kwon is wanted by law enforcement, and the Three Arrows Capital hedge fund.
