Selloff in Crypto Triggered by Hawkish Fed as Tech Stocks Drop Too

cryptonews.com:

Markets ranging from global technology stocks to crypto took a major hit over the past day, after a release of minutes from the last US Federal Reserve (Fed) meeting revealed a more hawkish stance than the market had expected.

At 10:09 UTC, bitcoin (BTC) traded at USD 42,738, down by 9% over the past 24 hours, while ethereum (ETH) stood at USD 3,334, down 13% over the same time period.

7-day price of BTC:

7-day price of ETH:

The drop in cryptoassets came as US stock markets also moved lower, with the technology-heavy Nasdaq index down by 3.12% for the day on Wednesday. At the same time, the broad S&P 500 index ended the day down 1.94%, its biggest one-day drop since a major sell-off on December 1.

As of Thursday morning (10:09 UTC), some stock indexes were already recovering, with for instance Hong Kong’s technology-focused Hang Seng Tech Index up by 1.37%, and US S&P 500 futures nearly unchanged for the day.

The large moves in the markets came after minutes from the Fed’s last meeting on December 14 and 15 showed that the central bank had discussed a tightening in monetary policy and rate hikes in order to fight inflation.

Explaining why the minutes led to such a strong move, Mike Loewengart, managing director of investment strategy at E*Trade Financial told Bloomberg that the minutes revealed “a more hawkish Fed than some may have expected.”

Commenting on the sharp sell-off in crypto in particular, Matt Dibb, Chief Operating Officer of the Singapore-based crypto fund distributor Stack Funds, told Reuters today that the fall “correlated with the ‘risk off’ move across most traditional asset classes,” while pointing to a drop in the Nasdaq index as especially important.

As is usual during major crypto market sell-offs, large