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Bitcoin Price Tanks As Federal Reserve Considers Interest Rate Hike

Cryptocurrency
Cryptocurrency

The price of Bitcoin has tanked, and several factors were responsible for the tumble in the number one crypto token of the world. First, Bitcoin’s (BTC) values tumbled along with the stock market after fears that the US Federal Reserve `is finally going to act against surging inflation which has reached record levels for the first time in 40 years.

 

Cryptocurrency

Cryptocurrency

All major crypto tokens end up in the red.

As of 08.04 pm ET on Thursday morning, the cryptocurrency was worth $42,892.80, bringing its market cap—the value of all Bitcoins in circulation—to $811.1 billion, according to the price-tracking site CoinMarketCap. However, the total crypto market tanked by 9.29% in the past 24 hours, and today stands at $104.65B.

The global crypto market has also ended in the red, just like the stock markets with major exchanges like Wall Street and NASDAQ. Dow Jones Industrial Average stock index tanked by more than one percent, and the S&P 500 fell by two percent.

News of an imminent interest hike by the Fed is causing instability in the market and affecting the crypto and the stock markets. The surging inflation is believed to be more widespread and expected to continue for a more extended period. It has finally woken the Fed, and the need to control inflation could lead to increased interest rates. On the other hand, the positive unemployment figures indicate that the economy is improving, and there is no need for lower interest rates.

BTC mining down 12% after unrest in Kazakhstan

The unrest has badly hit the Bitcoin mining process in Kazakhstan. As per the report, the internet has been cut, and for Bitcoin, this meant that one of the world’s most significant mining communities took a hit. It is unclear how much Bitcoin mining is done in Kazakhstan. Cryptocurrency news site The Block tweeted on Wednesday that there has been a fall of 12 percent in Bitcoin’s “hash rate,” which measures how many miners are involved in the Bitcoin network at a given time.

A similar situation occurred in April and May when China had come down harshly on Bitcoin mining, which led to a massive fall in BTC values. As a result, the crypto market is again worried about a repeat of what is known as the May 19 mayhem in the cryptocurrency market.

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