Cryptocurrency prices fall as traders move away from riskier investments
Cryptocurrency prices continued their recent fall on Monday as traders turned to safer assets and moved away from riskier investments.
Bitcoin (BTC-USD) was down 0.6% on that day to $ 41,597 (Â£ 30,609), its lowest level since September, with no signs of a rebound yet.
The second-largest crypto token ethereum (ETH-USD) also followed suit, falling 0.6% to $ 3,108 after falling below the $ 3,000 level on Saturday before recovering later.
Fear hit 10 on the Crypto Fear and Greed Index this weekend, which is the lowest since the crypto market hit its lowest level on July 21 before a rally of over 100%, indicating a possible rally of short-term relief.
In addition to the drift of riskier investments, prices collapsed last week as the U.S. Federal Reserve signaled an accelerated drive to raise interest rates and sell debt assets to combat the rising l ‘inflation.
“The Fed minutes raised expectations that the central bank of the world’s largest economy will now step up interest rate hikes to tackle spike in inflation,” said Nigel Green, managing director and founder of the deVere group, after the announcement.
âAs a result, there has been an instinctive sell-off on Wall Street and the crypto market as some traders believe such a move endangers the liquidity that has benefited many asset classes, including the bitcoin. “
Watch: What is Bitcoin?
Later this week, US inflation data will be released, with the market expecting the Consumer Price Index (CPI) to rise 7.1% for the year through December and to rise. 0.4% during the month. If the published figure is larger than expected, it could put additional pressure on cryptos as the Fed seeks to control it.
It comes as a U.S. listed blockchain company has started offering bitcoin dividend payments. BTCS Inc has stated that it intends to pay out a dividend of $ 0.05 per bitcoin share to investors, the amount it will pay based on the price of Bitcoin on the day of the ex-dividend date.
Investors will however have the choice of taking the so-called âdividendâ payment in fiat currency.
Read more: European markets tumble as traders watch rising COVID cases and expected rate hikes
Managing Director Charles Allen said, âWe want to reward our longtime shareholders for their continued support and encourage financial freedom by providing the means to enable direct ownership of bitcoin and other digital assets. “
Its stock price soared Thursday in the wake of the news, up 44% in the session, despite a significant drop in broader markets.
Commenting on the recent downtrend, Mike Novogratz, CEO of Galaxy Digital, said he expects bitcoin to hit a low of around $ 38,000 to $ 40,000.
âI know large institutions that go through their process to take a stand. They will see them as attractive levels to buy, âhe said.
Watch: What are the risks of investing in cryptocurrency?