Bitcoin Dropped Below $43K After FRS’s Statement
On the night of January 6, Bitcoin’s price dropped below $43,000, reaching a local low of $42,500 (on the Binance exchange). According to data from CoinGecko, BTC quotes have dropped by about 8.8% over the past 24 hours.
At the time of writing, the cost of Bitcoin did not exceed $43,077.
Bitcoin wasn’t the only one to lose ground on December 6. Many altcoins followed him. According to CoinGecko, all digital assets from the top 10 by market capitalization were in the red zone. Ethereum’s price dropped more than the rest during the day by 12.1%, Solana fell by 12.9%, Polkadot – by 13.5%, Terra – by 12%.
The cryptocurrency market crash came immediately after the release of the US Federal Reserve System (FRS) report on its readiness to raise the base interest rate earlier than expected. According to the December meeting protocol of the Open Market Committee (FOMC), the regulator intends to accelerate the rate of interest rate hikes in order to strengthen the economy due to the growing inflation rate.
The report also noted that soon after the increase in the key rate, it may be necessary to start reducing the volume of assets on the balance sheet, and the rate of its outflow will be higher than in October 2017.
Not only cryptocurrency but also traditional markets reacted negatively to the Fed’s statement. The S&P 500 Index (SPX) fell nearly 2%, the Dow Jones Index (DJI) fell 1.07%, and the Nasdaq Composite Index (IXIC) fell 3.34%.