- Bitcoin and ethereum were both down on Thursday as hawkish Fed comments sent the crypto market down
- Crypto market followed the stock market lead as further downside looks likely with rate hikes imminent
- Altcoins lead the dip with solana and avalanche down over 6% as cosmos sheds previous gains and drops 10%
Bitcoin dropped as much as 5% Thursday as cryptocurrencies fell across the board, with altcoins leading the way, on the back of surprisingly hawkish comments from the Federal Reserve.
Cryptocurrencies have slumped in recent weeks as investors priced in rising inflation and worried about impending US interest-rate hikes.
Bitcoin was down 4.17% in the last 24 hours at $36,381 at last check Thursday, according to CoinMarketCap data. Earlier in the day, the token touched $35,698, trading around the six-month lows last seen on Monday.
It is currently down 13.68% over the past week, and trading at almost half of its November record high of close to $69,000.
Ethereum, the second-biggest digital currency after bitcoin, was 3.66% lower at $2,430. It has suffered significant losses over the last week, sinking 22.80%, and is far off its record high of close to $5,000 hit in November.
In the wider crypto market, which lost about $100 billion off its total market value overnight, altcoins were taking the biggest hit. Solana was 6.42% lower at $90.51, and polkadot lost 5.54% to reach $17.84. Terra luna fell 5.13% to $60.22.
On Wednesday, Fed Chair Jerome Powell refused to rule out a string of aggressive rate rises, and admitted that a rate hike at every monthly Fed meeting this year is not off the table.
Markets had been pricing in four hikes in 2022, and that expectation has pushed up bond yields, which has made crypto assets and high-growth tech stocks look unattractive.
The declines on Thursday reflect the "institutionalization" of crypto assets — that is, that they are increasingly trading like other risky assets, according to Michael Brown, head of market intelligence at Caxton.
"Unsurprisingly, given that the 'easy money' party is now coming to an end, it is the most risky assets — crypto – that are bearing the brunt of the market's ire," he told Insider.
"With the Fed likely to ramp up the hawkish commentary in upcoming remarks, further downside looks likely."