In reaction to the Federal Reserve’s minutes showing that it expects to raise interest rates faster in 2022 thus further boosting the safe-haven currency, Ethereum’s native token, Ether, plunged sharply in value hours after the minutes were released.
According to the minutes of the Federal Open Market Committee (FOMC), the committee is in favour of raising short-term rates “earlier than participants had anticipated.” The CME Group explained that there is a 2/3 chance that interest rates first rise in March.
After the Fed’s announcement, Ether returned more losses to investors than the pioneer Crypto.
NewsBeatng reports that in the aftermath of the release of the minutes, the price of Ethereum fell by over 13% to $3,300. Bitcoin (BTC) lost a little over 10% to nearly $42K during its plunge, mirroring similar moves across the crypto market.
Crypto markets are sputtering south as the Fed begins to reduce liquidity. Dollar appreciation, bolstered by, among other things, an impressive U.S. jobs report, has kept a significant number of whales on the sidelines.
Those who have invested in crypto for some time know that volatility is part of the game. Despite this, it is always disappointing to lose money, and many of the most popular cryptocurrencies have suffered recently. As a whole, crypto markets have fallen 30% since their peak in November 2021.
Investors unwind tokens that are generating a better long-term return than Bitcoin. Ether returned around 175% over the last 12 months despite the US Fed-led drop. Bitcoin, on the other hand, generated profits of nearly 157% in the same period.