$300 Billion Crypto Price Crash Suddenly Accelerates As Bitcoin, Ethereum And XRP Traders Brace For A Fed Shock

$300 Billion Crypto Price Crash Suddenly Accelerates As Bitcoin, Ethereum And XRP Traders Brace For A Fed Shock

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bitcoin
btc
and major cryptocurrencies including ethereum and XRP
XRP
—have fallen sharply as traders prepare for a correction (and a potentially brutal crackdown from the Biden administration).

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The price of bitcoin has plummeted more than 10% since this time last week. even though JPMorgan CEO made a surprise turn on bitcoinwith the downward trend suddenly accelerating and wiping $300 billion off the combined bitcoin, ethereum, XRP and crypto market since peaking at $2.8 trillion earlier this month.

Now, as Elon Musk makes dramatic return to the cryptocurrency marketbitcoin, ethereum, XRP and cryptocurrency traders are watching the Federal Reserve's interest rate decision on Wednesday, which could sink prices further.

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In addition to the Fed's interest rate decision on Wednesday, which is expected to keep rates unchanged, officials will update their forecast for the coming months, which currently calls for three cuts in 2024.

However, a survey among economists conducted by the Financial times found The Federal Reserve will be forced to keep interest rates high for longer than markets and central bankers anticipate. Growing expectations that the Federal Reserve is set to declare victory in its war on inflation have sent stock and cryptocurrency markets to record highs in recent weeks.

However, last week, US consumer price index (CPI) and producer price index (PPI) inflation data showed higher-than-expected price increases.

Meanwhile, Japan's central bank raised interest rates for the first time since 2007, tightening monetary policy as fears of deflation eased and inflation rose.

The “high rate of inflation in the US could lead the Federal Reserve and other central banks to raise interest rates, which could slow price increases and cause some pullback in cryptocurrency prices,” Tristan said Frizza, CEO of Zeta Markets, in emailed comments. .

“However, the direct impact of inflation on consumers, eroding their assets, may lead them to invest more in cryptocurrencies to offset these effects. The prevailing narrative that bitcoin and other cryptocurrencies are 'immune' to inflation, along with “Growing market interest and institutional participation in crypto could spur greater participation in cryptocurrency markets.”

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MORE FROM FORBESJPMorgan CEO Issues Shocking Bitcoin Reversal as $1 Million Price Prediction Suddenly 'Advanced'

The bitcoin and cryptocurrency market has been boosted by the debut of a fleet of bitcoin spot exchange-traded funds (ETFs) on Wall Street this year. New bitcoin ETFs have raised billions of dollars and the largest have become some of the fastest-growing ETFs in history.

“In recent months, the launch of the US bitcoin spot ETF and the US Federal Reserve's shift in monetary policy have shifted crypto sentiment from cautious optimism to euphoria,” he said Ed Hindi, chief investment officer at Tyr Capital, in emailed comments, pointing to the crypto fear and greed index currently in extreme greed territory. “Historically, this has signaled short-term 'cooling off' periods.

However, Hindi remains confident that this is just a temporary dip before the price of bitcoin and the broader crypto market resumes its upward march.

“We expect next year to see new all-time highs in bitcoin and ethereum and much broader institutional participation in crypto assets. In our view, ethereum and other altcoins [smaller cryptocurrencies] will surpass bitcoin.”

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