Bitcoin's value has reportedly experienced a significant crash, attributed to a broader apprehension within the financial markets, with the leading cryptocurrency witnessing a decline of more than 7%. Over the span of the last week, it has seen a drop of nearly 12%, according to a report from The Independent.
“The drivers really have been of late the rising Treasury yields and that is signaling a more risk-off investor sentiment,” Art Hogan, chief market strategist at B Riley Wealth, said in the release. “Investors are looking at (better-than-expected economic data) and saying the Fed likely isn’t restrictive enough yet.”
Similar downturns have been observed among other prominent digital currencies, though not as pronounced. Ethereum, the second-largest cryptocurrency by market capitalization, has witnessed a decline of around 10% in its value during the past week, according to The Independent.
These challenges have translated into a 5.7% overall decrease in the cryptocurrency market within the last 24 hours, as reported by the tracking website Coinmarketcap. Trading volumes have surged significantly, soaring by almost 80% in the same 24-hour period, The Independent reported.
The sudden drop in the cryptocurrency's price Aug. 17 marks the most substantial single-day decline since November 2022, a period characterized by the collapse of the major exchange FTX, which reportedly caused ripples of uncertainty across the crypto landscape. In this instance, no direct connection to cryptocurrency market events was evident, The Independent report said.
Instead, investor unease appeared to stem from broader economic concerns, affecting traditional assets as well. Wall Street's principal indices faced downward pressure Aug. 18, extending their decline for the fourth consecutive session, largely driven by the underperformance of mega-cap growth stocks. The presence of robust U.S. economic indicators ignited apprehensions of prolonged higher interest rates, according to The Independent.
Amid a flurry of strong economic data, including a decline in weekly jobless claims, investor expectations for rate cuts were curtailed, causing government bond yields to rise. The likelihood of the Federal Reserve maintaining current interest rate levels during its September meeting is currently estimated at almost 91% by the CME Group's FedWatch tool, The Independent reported.
