Cryptos Plunge As Fed Fears Hoist The Dollar

cryptocurrency oct19 28sep22 lt

Cryptos oscillated wildly as the Dollar responded to recent hawkish expectations from the Fed. Crypto market capitalization plunged more than 5.5 percent overnight amidst the Dollar Index touching a fresh two-decade high of 114.78 versus the high of 114.51 scaled on Monday.

A Reuters poll released earlier showed that economists expect the Fed to raise the rates by another 75 basis points in the next review in the beginning of November. The hawkish expectations surrounding the Fed stemmed from assessment that the Fed would be willing to accept the short-run pain of recession instead of the long-run pain of inflation expectations becoming unanchored.

Markets across regions and asset classes felt the pain of factoring in a Fed that continues to be hawkish and determined to returning inflation to the 2 percent objective. Prices of stocks, bonds, gold, crude oil etc., moved drastically as the Dollar Index surged ahead.

Crypto market capitalization ranged between $975 billion and $908 billion in the past 24 hours. It is currently at $922 billion, versus $972 billion a day earlier.

In top 100 crypto assets category, the number of cryptocurrencies trading in positive territory on a year-to-date basis is 2, on a 30-day basis is 23, on a weekly basis is 39 and on an overnight basis is 8.

Bitcoin dropped more than 6 percent overnight to trade at $19,014.73. BTC, which ranged between $20,302 and $18,553 in the past 24 hours is down 1 percent on a weekly basis and 60 percent on a year-to-date basis.

Ethereum shed around 7 percent in the past 24 hours to trade at $1.296.20. Ether ranged between $1,395.95 and $1,267.87 in the past 24 hours. ETH is down 4 percent on a weekly basis and 66 percent on a year-to-date basis.

6th ranked XRP (XRP) extended losses, with a 9 percent overnight decline, the highest among the top 20 cryptos.

90th ranked Reserve Rights (RSR), a crypto token tagged to the DeFi and Store of Value categories is the top gainer with a 13 percent overnight rally.

37th ranked Quant (QNT) gained more than 4 percent overnight. 80th ranked STEPN (GMT), 91st ranked Celsius (CEL) and 19th ranked UNUS SED LEO (LEO) also bucked the bearish trend with a 1 percent overnight gain.

23rd ranked Cosmos (ATOM) topped losses of more than 10 percent. 59th ranked Maker (MKR) and 98th ranked 1inch Network (1INCH), both declined more than 9 percent.

Meanwhile the Fed Chair, Jerome Powell has called for a regulation of the DeFi sector. In a panel discussion as part of the "Opportunities and challenges of the tokenization of finance" event, organized by the Banque de France on Tuesday, the Fed Chair opined that the monetary policy normalization seen all over the world revealed significant structural issues in the DeFi system as well as conflicts of interest. Powell also stated that there was no rush to introduce Central Bank Digital Currencies.

Terra Cofounder Do Kwon has refuted allegations of attempting to cash out Bitcoins after a South Korean court issued arrest orders. He also denied any role in the transfer of assets from Luna Foundation Guard to some crypto exchanges.

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