- Bitcoin Price plummets roughly 50 percent since its all-time highs.
- Federal Reserve raised its rate by half a point to fight inflation.
- Many companies and platforms are active in promoting the use of digital currencies.
May doesn’t appear to be a good month for investors in cryptocurrencies.
Since its all-time high of $67,802 USD in November 2021, the market has continued its downward trajectory. The price of digital currency has fallen roughly 50 percent since.
As of Tuesday morning, Bitcoin, the world’s largest cryptocurrency is down to $31,540, according to data provided by CoinMarketCap.
It is on the verge of being the worst five-day stretch since March 16, 2020, when it fell almost 38%.
As of Tuesday morning, the price of Ether was $2,381.32, which is close to 6 percent below its price on Sunday.
The price swings of Cryptocurrencies have been well known. After many years of being dominated by individual investors, hedge funds like Blackrock and money managers have started to exercise control over the markets.
Crypto markets have moved in tandem with traditional markets as professional investors begin trading these digital assets. Similar to technology stocks, many institutional investors buy cryptocurrencies as risk assets. During times of turbulence, investors tend to retreat to safer corners of the market like real estate.
The stock market dropped last week after the Federal Reserve raised its rate by half a point to fight inflation.
As Americans are forced to pay more for home mortgages and auto loans, Fed Chairman, Jerome Powell was explicit in that rate increases the Fed already has in mind may be disagreeable, stating that they were:
Not going to be pleasant.
There could be more increases during the summer, according to Powell.
Some of the central bank’s $9 trillion asset portfolio is also being sold.
With investors bracing for rising interest rates, the prices of cryptocurrencies have been stagnant for much of the year. Over the past 24 hours, the market volume in the crypto market has been more than $200 billion, according to TradingView. The global market for digital currency fell to over $1.5 trillion.
Bitcoin, Ethereum, and other cryptocurrencies have seen an uptick in investment and activity over the past year, and this has led to an increase in the number of platforms and companies interested in promoting their use.