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Proponents of Bitcoin argue that its limited supply should make it an inflation-proof asset akin to gold.
Dreamstime
Bitcoin slid sharply after the Federal Reserve released minutes of its December meeting, with policy makers indicating growing unease over inflation and the potential for interest rates to start rising as soon as this March.
Bitcoin was down more than 4% to $44,200, falling from around $46,000 soon after the Fed made the minutes public.
Fed officials indicated that inflation readings and tight labor conditions could warrant an interest-rate increase “sooner or at a faster pace than participants had earlier anticipated.” The minutes, from the Dec. 14-15 meeting of the bank’s monetary-policy committee, also indicated that the Fed may start to pare back its $8.8 trillion balance sheet “relatively soon” after raising its benchmark federal-funds rate.
The selloff in Bitcoin coincided with a sharp downturn in equities, with tech taking it particularly hard. The
Nasdaq Composite
Index was off 2.7% to 15,190, faring worse than the broader
S&P 500,
which was down 1.4% to 4,725 shortly after 3 p.m.
Bitcoin wasn’t the only cryptocurrency falling hard on prospects for higher interest rates and tighter financial conditions. Ether was off 4.6% to $3,640. Many other “alt-coins” were faring worse with Solana down 6.3% to $158, Cardano off 5.4% to $1.25, and Terra falling 7.4% to around $80.
The selloff in Bitcoin is another sign that it is acting more like a tech stock than an inflation-fighting store of…
