Fears of the Fed's Policy Changes Send Huge Losses in the Cryptocurrency Market Bitcoin is now valued at around half of its November market highs.
By Chloe Arrojado Edited by Jessica Thomas
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The volatile cryptocurrency market is taking a hit as the Fed is expected to hike interest rates in an effort to combat inflation.
"Central banks and governments have played a role in jacking up these markets, and as those policies reverse, then I think they will have a role in depressing them," Paul Jackson, Invesco's global head of asset allocation research, told Business insider.
Bitcoin, the world's largest cryptocurrency, has fallen from its November highs of around $70,000 to around $35,000. Since the beginning of 2022, the cryptocurrency giant has lost around 23 percent in value. Ethereum, the second-largest cryptocurrency, has dropped around 35 percent in value since the new year.
Related: Head of Major Bank Says You Should Only Invest in Cryptocurrency If You're Prepared to Do This
Some have seen cryptocurrency's success in part due to financial aid measures from the government during the Covid-19 pandemic. But now that the Fed is focused on fighting inflation, investors seem to have doubts about the asset.
"One of the bullish drivers for crypto over the last two years has been the surplus of pandemic-related fiscal and monetary stimulus globally, and much of that is coming to an end," David Duong, head of institutional research for U.S. cryptocurrency exchange Coinbase, wrote in a report.
As of Monday morning, Bitcoin's value over a 24-hour period is down 3.26% while Ethereum is down 6.38%.
Related: How Blockchain and Cryptocurrency Can Revolutionize Businesses
