After central bankers repeated their inflation worries at the European Central Bank’s annual event on Wednesday, bitcoin slid around $19,000 throughout the Asian afternoon.
US equity market futures sank
Jerome Powell, the chairman of the Federal Reserve, confirmed the commitment of the central bank to raise interest rates in order to reduce inflation.
He stated during the ECB meeting that the problem of inflation was more concerning to him than the potential for rising interest rates to cause the U.S. economy to enter a recession.
Ether fell 9.9% during the course of the last day, while Solana’s SOL fell as high as 11%, among other major cryptocurrencies.
The total value of the bitcoin market dropped by 4.3 percent.
According to Reuters, Powell stated that the Fed needed to hike rates quickly because a gradual increase may give consumers the impression that higher commodity prices would continue.
His statements about a week ago hinted that rate rises may be delayed until next year.
Central banks around the world are debating whether to raise interest rates in the face of rising prices.
Spain recorded a 37-year high inflation rate of 10% earlier this week, while India and China are concerned about the chances of economic collapse.
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Such worries add to the already severe selling pressure on bitcoin. In recent months, cryptocurrency has traded similarly to volatile technology stocks, and it has dropped 58 percent this year.
Contagion concerns from the crypto business, such as the prospective insolvency of crypto lenders and the collapse of major crypto fund Three Arrows Capital, have added to the downward pressure on the asset, which was previously seen as a potential inflation hedge.
Following Powell’s remarks, US equity market futures sank, with the S&P 500 down 1.59 percent and the tech-heavy Nasdaq 100 down 1.9 percent.
Asian markets were down, with Japan’s Nikkei 225 down 1.54% and the Asian-focused index Asia Dow down 1.14 percent.
Source: https://www.thecoinrepublic.com/2022/07/01/fed-alerts-about-inflation-bitcoin-plunges-to-19k/