Bitcoin (BTC) -9.81%, Ethereum (ETH) and other major cryptocurrencies have fallen sharply, wiping billions from the crypto market in just a matter of days.
The bitcoin price has dropped to under $32,000, its lowest since July last year, as extreme fear grips traders in the aftermath of the Federal Reserve's biggest interest rate hike in years and the complete breakdown in traditional markets. Bitcoin is more than 50% below its record high of near $69,000 from late last year and continues fall as panic has set in.
Ethereum, Binance, solana and cardano are all down about 15% in the past week as cryptos are susceptible to the same concerns that are dragging down the Dow, S&P 500 and Nasdaq.
Cryptocurrencies are increasingly moving in sync with tech stocks with investors treating both as risk assets and often retreating to safer corners of the market during bouts of market volatility. It was once believed Bitcoin was immune to the global inflation risks, but as inflation is spreading across most other asset classes we are seeing that's no longer true.
All the 'experts' and stock analysts say we should expect to see the downward trend continue. The number one issue right now is inflation fears... Institutional investors are worried about interest rate hikes from the Federal Reserve and a possible economic slowdown. This has sent bond yields skyrocketing so investors are moving their money from riskier assets to these bonds. The 10-year Treasury bond yield is now hovering just above 3.0%, having more than doubled this year.
The surge in yields has also helped lift the value of the dollar. The US Dollar Index is now trading near its highest level in twenty years. The Federal Reserve is starting to pull back on monthly bond purchases and other stimulus which could be bad news for all sorts of speculative assets. It seems like everything the government has done to save markets could actually be the downfall of markets as we know them. The rich will not lose money they are nimble and are stealing the middle class's 401Ks right now. I have lived through bear markets and Bitcoins massive drops so I have the liquidity to keep adding. As Buffet says be greedy when others are fearful.
