Bitcoin down over 50% from record high
The world’s leading cryptocurrency hovered at $32,360 in New York’s noon trading, which is equivalent to 30% off from its December 2021 close of $46,200.
Bitcoin price has fallen by almost 50 percent from its November record high as the value of most risky assets dropped today, Monday, on fears that the Federal Reserve could send the US economy into recession by embarking on the highest rate hike in three decades.
The world’s leading cryptocurrency hovered at $32,360 in New York’s noon trading, which is equivalent to 30% off from its December 2021 close of $46,200. It was down even more when compared to its November record high of $68,991.
"Everything bar the US dollar has fallen today - cryptos included," Fawad Razaqzada, an analyst at StoneX.com, wrote in a commentary. "At just over $32K, Bitcoin is now more than 50% cheaper compared to the record high it had reached last year. The next big level at $30K is now within sight, but it remains to be seen whether it can bottom around this psychological level."
Risk assets took a drubbing as central bank officials at the Federal Reserve discussed whether the next US rate hike should be 75 basis points, with some suggesting that would be too much while others saying it might be needed to stop runaway inflation. The last time rates were raised by 75 bps was in 1994.
Money markets traders have already priced in a 79% probability of a 75 basis points hike at the Fed’s coming meeting on June 14-15 — after last week’s 50-bps increase at its May meeting, which in itself was the biggest increase in twenty years.
The Fed insists that its high rate hikes regime will not tip the US economy into recession; however, markets aren’t buying that argument for now.
Stocks on Wall Street continued to drop, with the Nasdaq Composite Index - which groups top names such as Facebook (banned in Russia as an extremist organization), Amazon, Apple, Google, and Netflix - hitting a session low of 11,714 today that matched a two-and-half-year bottom from November 2020. Nasdaq has been already down 5% for May, extending April’s 13% selloff. The tech barometer has lost 25% year-to-date.
The dollar, the chief beneficiary in any rate hike, has soared, based on the performance of the Dollar Index, to 20-year highs, which pits the greenback against 6 other major currencies. The index hit today an intraday high of 104.12, a peak since 2002.