Crypto crash gathers momentum as inflation marks fastest pace of growth since 1981

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Bitcoin and other cryptocurrencies tumbled on Sunday, as losses in the asset class piled up over the weekend on U.S. data that showed lingering inflationary pressures in May, marking the pace of increase fastest since December 1981.

BitcoinBTCUSD,
-0.83%
fell around 3% to $27,743, with Ethereum dropping more than 3.8% to around $1,494, while bigger losses were seen for meme coins such as Dogecoin DOGEUSD,
-3.27%,
up more than 5%, when last checked late Sunday morning, according to data from CoinDesk.

Cryptocurrencies, which are traded around the clock, are posting heavy losses for Wall Street after data on Friday showed US inflation rose 1% in May, well above the monthly rise in 0.7% predicted by economists polled by the Wall Street Journal. The annual rate rose 8.6%, surpassing the 40-year high of 8.5% seen in March. The Dow Jones Industrial Average DJIA,
-2.73%,
S&P 500 SPX,
-2.91%,
Nasdaq Composite COMP,
-3.52%
suffered the biggest weekly losses since January. The Dow Jones fell 880 points on Friday.

Investors fear inflationary pressures could trigger more aggressive action from the Federal Reserve, which calls its two-day policy meeting on Tuesday with an expected half-percentage-point hike in the federal funds rate at the end of the meeting on Wednesday. This key rate is currently in a range of 0.75% to 1%.

Equity losses swept away assets perceived as riskier, with cryptocurrencies also falling on Friday. Since Sunday’s price of just over $27,000, bitcoin has fallen nearly 60% from a November 2021 high. #Cryptocrash and #bitcoincrash were trending on Twitter.

Lily: Stocks Crash Again as Rising Inflation Sends Market Shockwaves: What Investors Need to Know

“From the perspective of the next cycle, we are probably close to the bottom, but that does not mean that the price can drop another 50%,” warned Bobby Ong, co-founder and chief operating officer of the company, on Sunday. CoinGecko crypto price tracker. a Twitter feed.

“FWIW, I don’t think we’re at the bottom, but conferences are still full, crypto parties are still extravagant, still see excess among teams, macro environment is still weak. Layoffs have started but not yet generalized. Stay strong and manage your positions well,” he said via Twitter.

Amid falling cryptocurrency prices this year, some crypto trading platforms, including Coinbase Global Inc. COIN,
-7.92%
have frozen hiring or announced layoffs, with crypto exchange, Gemini, recently announcing that 10% of jobs would be cut.

Lily: ‘I thought it was a bad joke’: they gave up other job offers to work for Coinbase and are now unemployed

Crypto prices could drop much further, according to some industry watchers. That said, some digital asset bulls argue that the current downturn could also mean potential opportunities:

Other observers of the crypto carnage have argued that the selloffs can serve as a reminder of the benefits of diversification:

For some, however, the message is frankly that investors are wary of the losses ahead across a wide range of asset classes:

Lily: ‘The goal is never to seek the top’: The hair-raising wild ride of a 30-year-old investor who battled NFT hackers and dodged the crypto crash

And: A new crypto bill could give the CFTC a boost in its quest to regulate digital assets


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