On Wednesday, cryptocurrency prices fell as the overall market fell by more than 2%, bringing the total market capitalization below $2 trillion. According to CoinMarketCap, the global crypto market is now worth roughly $1.95 trillion, after peaking at close to $3 trillion in mid-November.
This drop comes as US Treasury yields reached two-year highs, causing stocks to fall as well. This has been a recurring theme in 2022, with the Federal Reserve signaling that it may raise interest rates multiple times throughout the year.
At the time of writing the flagship cryptocurrency is trading at $42,180 and has gained just 1.6 percent in the last 24 hours. As for Ethereum the coin has gained just 0.1 percent and is trading at $3126.
In the top ten coins, Cardano is the biggest loser today as it has lost around five percent in the last 24 hours. Terra on the other hand has gained five percent and is trading at $79.
Cryptocurrency Market to Decline Further?
Galaxy Digital CEO Mike Novogratz gave a gloomy warning regarding cryptocurrencies and the tech-heavy Nasdaq Composite stock market index in a recent tweet, suggesting that they will continue to be under pressure as long as interest rates rise.
Due to stock market weakness, Novogratz anticipated that Bitcoin would underperform in early 2022.
By adopting a more hawkish tone, the Federal Reserve has scared the markets. To combat ongoing inflation, Goldman Sachs expects the central bank to boost interest rates at least four times this year.
JPMorgan CEO Jamie Dimon recently stated that the Federal Reserve might raise interest rates up to seven times, but he did not provide a time frame.Bitcoin is expected to bottom out at $38,000, according to Novogratz.