The Magazine for Asian Investors
The global market capitalization of cryptocurrencies has dropped by $800 billion in a month amid fears that the U.S. Federal Reserve will raise interest rates and reduce its balance sheet size (Quantitative Tightening: QT), which will drain liquidity from the market.
Coinmarketcap.com, which collects prices of more than 1,000 cryptocurrencies from global exchanges, noted that the total market capitalization of cryptocurrencies fell to $1.4 trillion yesterday, down from $2.2 trillion on April 2. The market capitalization of cryptocurrencies previously reached its highest level in history at $2.9 trillion in November 2021.
Bitcoin fell below $30,000 in the early morning hours yesterday. It hit a 10-month low before recovering above $31,000.
Bitcoin has plummeted more than 50% since its all-time high of $69,000 on November 10, 2021.
Investors expect the Fed to raise interest rates by more than 2.00% this year, putting the short-term rate at 2.85% by the end of the year.
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Wednesday, May 11, 2022