Bitcoin, Ether Lead Crypto Market Crash as US Federal Reserve Validates Hike in Interest Rates

Stable coins like Tether and USDC were the only gainers on the day.

By Shomik Sen Bhattacharjee | Updated: 6 January 2022 11:38 IST

Bitcoin, Ether Lead Crypto Market Crash as US Federal Reserve Validates Hike in Interest Rates

Photo Credit: Unsplash/ Executium

Bitcoin price is down again and by quite a bit

Highlights

Bitcoin prices fell to a three-month low
Ether fell by a whopping 9.73 percent on global exchanges
Dogecoin, Shiba Inu weren't spared by the crash either

Two major events in the cryptocurrency space have rocked Bitcoin's value down to a three-month low as the entire market witnessed a cascading crash. At the time of writing, Bitcoin is valued at $43,168 (roughly Rs. 32.1 lakh), down by over 7 percent over the past 24 hours on global exchanges. On Indian exchanges like CoinSwitch Kuber, the price of the most popular cryptocurrency stands at Rs. 34.92 lakh, down by 6.17 percent over the past 24 hours.

The big slump occurred as the US Federal Reserve indicated it could move up its timetable for raising interest rates to mid-March. The US Federal Reserve is essentially going to stop printing money and make it more expensive to borrow in order to steady the economy and keep rising inflation in check. Meanwhile, Kazakhstan, the country which accounts for a large 18 percent of the Bitcoin network's hash activity, witnessed a nationwide Internet shutdown, causing BTC's hashrate to drop by 13.4 percent — reflecting in a sharp fall in value.

Ether, the second-largest cryptocurrency by market capitalisation saw a substantial drop as well. The Ethereum-based cryptocurrency witnessed a plunge of 8.3 percent over the past 24 hours after a healthy start to the year. At the time of publishing, Ether is valued at $3,759 (roughly Rs. 2.79 lakh) on CoinSwitch Kuber while values on global exchanges see the crypto pegged lower at $3,446 (roughly Rs. 2.56 lakh), where the coin saw a steeper drop of 9.73 percent over the past 24 hours. The dip sees Ether's performance improve marginally but still down 6.8 percent in value over the past week.

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Gadgets 360's cryptocurrency price tracker reveals a bad day for the entire market as stable coin appears to be the only crypto assets to have gained in value. Ripple, Cardano, Polygon, Litecoin, Chainlink, and Polkadot all witnessed drops in value, while Tether, and USDC rose in value.

Meme coins haven't been spared by the crash either. Dogecoin is down 6.86 percent in 24 hours to be valued at $0.17 (roughly Rs. 12.67). Meanwhile, Shiba Inu is down 7.61 percent to be valued at $0.000032 (roughly Rs. 0.002417). SHIB's value has dropped by 10.2 percent in the past week, while Dogecoin is down by 6.9 percent.

As per CoinGecko, Bitcoin's value has dropped by over 7 percent over the past week, even though the cryptocurrency is up by more than 26 percent year-on-date.

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Meanwhile, a member of India's Monetary Policy Committee (MPC) has given Indian crypto investors some respite from rumours suggesting that the crypto sector could be totally prohibited in the country. Ashima Goyal, in a recent interview with the Press Trust of India, reportedly said that imposing a blanket ban on crypto-related activities is difficult to implement. The main reason why India will not legalise any cryptocurrency as legal tender, as per Goyal, is the possibility of it being misused for unlawful activities.

Interested in cryptocurrency? We discuss all things crypto with WazirX CEO Nischal Shetty and WeekendInvesting founder Alok Jain on Orbital, the Gadgets 360 podcast. Orbital is available on Apple Podcasts, Google Podcasts, Spotify, Amazon Music and wherever you get your podcasts.

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Cryptocurrency Prices across Indian exchanges

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