Rate hike hint of Federal Reserve sends cryptocurrencies crashing

On Wednesday night, cryptos including Ethereum, Bitcoin, Solana, Cardano and Terra slipped steeply after the US Federal Reserve released minutes of its December meeting in which the Central Bank hinted it could begin increasing interest rates to handle challenging high inflation.

On November 11, 2021, Bitcoin touched an all-time high of $68,749. It has outperformed all capital markets regarding yearly price growth in 2021, with a 60% return. Other coins also responded strongly to the news. Cardano, Ethereum, Solano, Shiba Inu and Binance all slid by 10% or more during the two days till Thursday evening.

Bitcoin has been under pressure recently because of the central bank’s hint that they are anticipating moving away from low-interest rates and that their bond purchasing programs will eventually stop. According to experts, the drop was anticipated because the market had been range-bound and very unpredictable in the previous few days. Experts also believe that the selling pressure was mainly because of European and US investors booking profit.

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