Bitcoin Sinks Below $22,000. Crypto Stocks Coinbase And Marathon Digital Tumble.
Bitcoin fell below $22,000 on Friday as global stocks fell amid uncertainty over how aggressively the US Federal Reserve will curb inflation by raising interest rates.
Bitcoin, the world's largest cryptocurrency, has fallen 8.6% to $21,463 in the past 24 hours, according to CoinDesk. The selloff comes after bitcoin briefly hit $25,000 over the weekend for the first time since mid-June. Crypto supported slowing US inflation. Traders believed that put some pressure on the Federal Reserve, which has been raising interest rates to try to tame rising prices.
But U.S. stocks fell on Friday and stocks in Asia and Europe fell after Federal Reserve officials took a slightly different view on the pace of future rate hikes. Fed President St. Still, Kansas City Fed President Esther George said "the case for another rate hike remains strong," but added that there was debate about "how soon that should happen."
Bitcoin and its ilk should theoretically trade independently of traditional finance, but have been found to be widely linked to other risk-sensitive assets such as stocks.
Craig Erlam, senior market analyst at Oanda, said that while the reason for bitcoin's selloff is unclear, "the fact that it barely recouped any of those losses shows that the move made sense."
Erlam added that a break below $22,500 "could be important if it holds and the next major test is a return to $20,000." He added: "The winter of cryptocurrencies is not over yet."
Ether, the second largest token, fell 8.7% in the last 24 hours to $1,697. Smaller tokens like Solana and Cardano also fell.
Cryptocurrency-related stocks such as Coinbase (ticker: COIN ), Marathon Digital ( MARA ), and Riot Blockchain ( RIOT ) fell 9.1%, 14.5%, and 9.7%, respectively.
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