What happened
After a decent rally in recent months, the crypto market is coming off a tough weekend as macro concerns continue to spark fear in the broader market.
Over the last 24 hours, the world’s largest cryptocurrency, Bitcoin ( BTC -3.21% ), traded more than 4% lower as of 11:05 a.m. ET. The price of the world’s second-largest cryptocurrency, Ethereum ( ETH -5.41% ), traded nearly 6.6% lower, and the price of Dogecoin ( DOGE -5.24% ) traded nearly 10% down. Dogecoin is also dealing with the evolving situation regarding Tesla founder Elon Musk and his position at Twitter.
So what
Bond yields continued to rise this morning as investors mulled the macro outlook, which is being impacted by several factors including rising inflation, Russia’s ongoing invasion of Ukraine, and the Federal Reserve’s monetary plans. The yield on the closely watched U.S. 10-year Treasury bill rose to around 2.75%. We now know the Fed is planning to raise its benchmark overnight lending rate, the federal funds rate, numerous times this year and also begin shrinking its massive balance sheet by as much as $95 billion per month later this year. The Fed may also raise the federal funds rate by a half a percentage point all at once this year, a deviation from its normal 0.25% rate hikes.
Image source: Getty Images.
“Bitcoin is down again as institutional investors grow nervous over the upcoming pace of tightening by the Fed,” Edward Moya, an analyst at Oanda, told Barron’s. “Bitcoin’s cage is the $38,000 to $48,000 range and that could hold over the next week or two.”
“Bitcoin and ether are highly correlated to the Nasdaq-100. If the NDX tanks, it will take crypto down with it,” Arthur Hayes, co-founder of BitMEX, wrote in a blog post yesterday.
In addition to the volatile markets, Dogecoin is dealing with its own set of issues related to Musk and Twitter. Securities and Exchange Commission (SEC) filings last week revealed that Musk had taken a 9.2% stake in Twitter….
