Bitcoin, Ethereum, Dogecoin, And Shiba Inu Are All Down Today For Various Reasons

The broader crypto market is down this morning due to concerns about how the Federal Reserve would intervene.

The Federal Reserve’s hawkish comments impacted the crypto market, with major digital tokens falling.

The price of many of the most prominent cryptocurrencies dropped today as investors weighed the Federal Reserve’s actions in the face of rising inflation.

The world’s largest cryptocurrency, Bitcoin (BTC -4.97 percent), has lost nearly 3.5 percent. Meanwhile, the price of Ethereum (ETH -6.70%), the world’s second-largest cryptocurrency, has down 5.4 percent, Dogecoin (DOGE -18.11%) is down 6.8%, and Shiba Inu (SHIB -9.46%) is down around 6.2 percent.

Bond yields in the United States Treasury notes are trading higher this morning as the market expects minutes from the Federal Reserve’s March meeting, where the Fed raised its benchmark overnight lending rate, the federal funds rate, for the first time since 2018. The Fed is expected to raise its benchmark rate at each of its next six sessions this year, according to the market.

Investors, analysts, and investors will be looking for signs in the Fed’s minutes about how aggressively the Fed expects to decrease its balance sheet, which has swelled to about $9 trillion.

The market fell sharply yesterday after Fed governor Lael Brainard stated publicly that the Fed must move quickly to reduce its balance sheet, thereby removing liquidity from markets. Brainard usually favors a low federal funds rate and loose Fed policy, so his comments were unexpected.

“As soon as our May meeting, the [Federal Open Market Committee] will begin to tighten monetary policy methodically through a series of interest rate hikes and by beginning to shrink the balance sheet at a quick pace,” Brainard said.

Last week, the larger crypto market was gaining, and many people regard Bitcoin as a hedge against inflation, but cryptocurrencies have struggled since last October due to a hawkish Fed. This could be due to the fact that rising inflation, increasing financing costs, and a lack of liquidity in the market leave investors with less money to put into highly speculative investments like cryptocurrencies.

Ethereum is regarded as the forerunner in terms of smart contract functionality and decentralized applications. Furthermore, for the last two years, the network has been undergoing a significant set of modifications that are designed to make it more scalable and secure. The official switch to the new network is expected to take place this year, which analysts believe will result in a rise for Ethereum.

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