Bitcoin and Crypto Now Set for a Surprise Bomb After Ethereum, BNB, XRP, Solana, and Cardano Price Drops $300 Billion

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Bitcoin
BTC
and cryptocurrency prices have been hit hard by a sudden crash over the past few days that wiped $300 billion from the combined crypto market, even as JPMorgan prepares a trillion-dollar crypto bazooka.

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Bitcoin price briefly crashed to below $21,000 per bitcoin, its lowest since late 2020 while Ethereum price dipped below $1,100. Bitcoin and Ethereum rebounded slightly but remain down 24% and 31% respectively in the past week alone, dragging down other major cryptocurrencies BNB
BNB
XRP
XRP
solana and gimbal.

Now, after worse-than-expected inflation numbers on Friday rattled investors, some economists are predicting the US Federal Reserve could accelerate its planned interest rate hikes, which could spell more pain for bitcoin and crypto. .

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“There’s a lot to do on the Federal Reserve’s policy update tomorrow,” Russ Mould, chief investment officer at broker AJ Bell, wrote in emailed comments. “Investors seem to be increasingly concerned that the central bank will become more aggressive with the pace of interest rates in an attempt to rein in inflation, given that the cost of living figures in May were higher than expected. .”

The Fed, led by Chairman Jerome Powell, will meet on Wednesday after Friday’s inflation data showed US consumer prices rose at their fastest pace since 1981 in May. Ahead of last week’s data, economists had widely forecast a 50 basis point interest rate hike, however, many raised their expectations on Monday once they had time to digest the data.

“We believe risk management considerations call for aggressive action to bolster the Fed’s inflation-fighting credibility,” Barclays economists wrote in a report released on Monday and seen by the the wall street journal, pointing to intensifying “protracted inflation risks”. and justifying a larger rate hike. JPMorgan, meanwhile, called the risk of a full 100 basis point hike “not insignificant,” in a note seen by Bloomberg.

The mood within the bitcoin and crypto community is grim following the latest crypto crash, with many expecting further declines as the Fed continues with its so-called quantitative tightening policy.

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MORE FORBESCrypto Price Prediction: Here’s When Bitcoin Could See a “Significant” Rebound and Why Ethereum Could Be “Struggling”

“More rate hikes from the Fed will drive down most risky assets,” Anthony Denier, managing director of trading platform Webull, said via email.

“The Fed is already planning to raise interest rates significantly to fight inflation, but this higher reading could force the Fed to raise rates by 75 basis points at its next meeting, instead of the 50 points expected base rates. Rising interest rates are bad for risky assets.”

The bitcoin and crypto market, including Ethereum, BNB, XRP, solana, and cardano, have moved in tandem with stock markets since the Fed announced it would begin scaling back its pandemic-era simulation measures. late last year, destroying the theory that bitcoin and to a lesser extent Ethereum, BNB, XRP, Solana and Cardano had started to act as an inflation hedge.

“Cryptos, contrary to myths built up over the past few years, are not an inflation hedge. Instead, we have found that they are very closely correlated to stocks, especially tech stocks. when stocks fall, so does crypto. And with stocks posting big losses, so does crypto.”

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