Cryptos Subdued As Rate Hike Fears Linger

Cryptocurrencies aligned with the bearish trend across world markets that sank in response to the Federal Reserve’s hawkish stance reiterated on Wednesday.

Worries about high interest rates dominated sentiment at Wall Street and other major bourses on Thursday. Nasdaq Composite tumbled 1.8 percent to close at 13,223.99 whereas the Dow Jones Industrial Average plunged 1.1 percent to finish trading at 34,070.42. European indices too closed deep in the red, with Germany’s DAX, France’s CAC-40, and the pan-European Euro Stoxx-50, all shedding more than 1 percent. Losses at U.K.’s FTSE 100 and Switzerland’s SMI were less than 1 percent, helped by the status quo adopted by both Bank of England and Swiss National Bank.

Surging bond yields in the U.S. too dampened the sentiment for cryptocurrencies, a non-interest-bearing asset. Two-year bond yields touched a 17-year high post the FOMC outcome. Ten-year U.S. Bond yields increased 0.20 percent overnight to 4.49 percent whereas instruments of the 30-year horizon increased 0.28 percent overnight to 4.57 percent. Increase in risk-free bond yields increases the opportunity cost of holding risky and non-interest-bearing assets like gold and cryptocurrencies.

Hawkish comments from Fed officials added to the anxiety reflected in the surge in bond yields. Markets also digested the fact that the median federal funds rate for 2024 which the Fed had projected in June to fall from 5.6 percent to 4.6 percent is now projected to fall from 5.6 percent to 5.1 percent only.

Overall crypto market capitalization dropped to $1.5 trillion, versus $1.6 trillion a day earlier.

Only 3 of the top-10 non-stablecoin cryptocurrencies are trading in the green zone on an overnight basis. XRP tops with gains of more than 1 percent. Cardano (ADA) led losses with a decline of 1.1 percent. On a weekly basis, Toncoin (TON) topped with gains of 17.8 percent. Here too, Cardano (ADA) was at the other extreme, shedding more than 2 percent during the past 7 days.

Down the hierarchy, 98th ranked Zilliqa (ZIL) shed 9.7 percent in the past 24 hours. 85th ranked Terra Classic (LUNC) also rose close to 9 percent in the past 24 hours. 25th ranked Cosmos (ATOM) shed 4 percent in the past 24 hours and was the biggest laggard.

Market leader Bitcoin traded between $26,772.63 and $26,389.30 in the past 24 hours. It is currently trading at $26,615.02, slipping close to 0.60 percent. The trading range was between $27,289.77 and $26,650.18 a day earlier.

Ether’s 24-hour trading range was between $1,601.54 to $1,573.31, versus $1,639.35 to $1,592.18 a day earlier. The leading alternate coin is currently changing hands at $1,595.15, which is 0.11 percent lower than the levels a day earlier.

Bitcoin dominates 49.2 percent of the overall crypto market followed by Ethereum that accounts for 18.2 percent of the overall market.

Third ranking Tether (USDT), the highest ranking stablecoin traded between $1.0006 and $0.9997 in the past 24 hours amidst reports of it lending its stablecoins. The Wall Street Journal had on Thursday reported that Tether Holdings resumed lending out its own stablecoins to customers, less than a year after it said it would wind down the practice. Placing on record the company’s excess equity of $3.3 billion and the expectations of making a yearly profit of $4 billion, Tether issued a strong rebuttal and reiterated its commitment to removing the secured loans from its reserves.

Overnight gains of 0.2 percent recorded by 4th ranked BNB (BNB) has caused the cryptocurrency’s price to rise to $210.95. The weekly loss decreased to 0.71 percent, whereas year-to-date losses decreased to 13.7 percent. The price movement comes amidst Binance, Binance.US, and Changpeng Zhao jointly filing a motion on Thursday to dismiss the lawsuit brought by the U.S. SEC.

5th ranked XRP (XRP) gained more than a percent in the day’s trade, lifting weekly gains to 2.9 percent and year-to-date gains to more than 50 percent.

6th ranked USDCoin (USDC), the second most valuable stablecoin traded between $1.0004 and $0.9997 in the past 24 hours.

Dogecoin (DOGE), the highest-ranking meme crypto, currently ranked 7th overall slipped 0.12 percent in the past 24 hours, 0.40 percent in the past week and 12.3 percent till date in 2023.

8th ranked Cardano (ADA) recorded an overnight decline of 1.1 percent, dragging weekly losses to 2.1 percent and year-to-date losses to 1.9 percent.

9th ranked Solana (SOL) the best performing cryptocurrency among the top 10 in 2023, traded flat on an overnight basis. SOL has recorded gains of close to 3 percent in the past week and 97 percent in 2023.

10th ranked Toncoin (TON) that gained 17.8 percent in the past week has edged lower on a year-to-date basis. It has slipped 1 percent overnight.

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