More than $1.3 trillion has been wiped from the cryptocurrency market so far in 2022, as the fallout from the FTX collapse continues to weigh on investor confidence.
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Bitcoin it fell on Wednesday and was on track for a down month as optimism about the debt ceiling rebounding faded.
The crypto market leader lost 3% and was trading at $26,879.49, according to Coin Metrics. Ether fell more than 2% to $1,855.55.
Both cryptocurrencies were heading for their first losing month in 2023. Bitcoin is on track to post an 8% loss, which would be its worst month since November 2022. Ether is down 2.5% this month. If it ends the day in red, that will make May its worst month since December 2022.
Bitcoin (BTC) in May
Crypto moved online with major stock averagesthat they were all lower as investors waiting for the House vote on the tentative agreement to raise the nation's debt ceiling and avoid a default on Wednesday.
"Avoiding a default is a relief, to be sure, but the incoming wave of issuance will remove liquidity from the market and drive up yields," said Noelle Acheson, economist and author of the "Crypto is Macro Now" newsletter.
"In theory, this should be at least the equivalent of another rate hike, but the CME swap market is pricing in another rate hike in June on top of the liquidity impact, with expectations of a rate cut deferred until November at the earliest," he added.
Cryptocurrency prices initially rose over the weekend after House Republicans reached a tentative agreement with the White House to address the debt ceiling. On Monday, bitcoin and ether rallied as high as $28,461.45 and $1,928.16, respectively, but started to pull back on Tuesday.
Bitcoin and ether are still up 62% and 54%, respectively, over the year.
โCNBC's Gina Francolla contributed reporting
