Bitcoin, Other Crypto See $360 Million Sold Off In Single Day
Bitcoin (BTC) and other cryptocurrencies have taken a considerable hit as the US Federal Reserve’s decision to raise interest rates has resulted in hundreds of millions of dollars being wiped out of markets.
The collapse of several banks has already led to an increase in liquidity, causing the reversal of a significant part of the quantitative tightening measures in just one week.
Now market intelligence company coinglass reported that in the last 24 hours alone, nearly $360 million worth of crypto assets were sold. The impact of the Fed’s action reverberated across the digital currency world, leaving investors and traders scrambling to adjust their portfolios.
Fed rate hike triggers Bitcoin selloff
The Federal Reserve’s decision to raise interest rates by 25 basis points on Wednesday in a bid to curb inflation is believed to have triggered the cryptocurrency asset liquidation.
This comes amid a global banking crisis that has unfolded over the past few weeks, which has sent the leading digital currency to a nine-month high above $28,000. On the day of the second FOMC meeting of the year, Bitcoin’s value surged even higher, reaching nearly $29,000.
However, when the news of the rate hike broke, Bitcoin price briefly dropped to the high $26,000 range. Despite this setback, the cryptocurrency rebounded and is currently trading at $28,309 at the time of this writing, data from cryptocurrency market tracker CoinMarketCap shows.
Most Notable Cryptocurrency Sales
Cryptocurrency settlement helps minimize risk and stabilize markets, ensuring traders meet their financial obligations. When a trader uses leverage to invest in cryptocurrency, he borrows funds from a brokerage or exchange to increase his profits.
However, this also exposes them to greater risk as their positions can be liquidated automatically if their losses exceed their margin. In other cases, a trader may choose to voluntarily liquidate its assets in response to market conditions or free up funds for other investments.
BTC total market cap now at $545 billion on the daily chart at TradingView.com
Digital currency traders sold nearly $33 million worth of Bitcoin and lost nearly $19 million worth of Ethereum (ETH). Litecoin (LTC) and XRP also saw more than $1 million in sales each, with $2.11 million and $1.22 million liquidated, respectively.
One of the main drivers of depositor flight is people moving money from low interest savings accounts to high interest money market accounts (Treasury Libraries).
This senseless increase in the rate will worsen depositor flight.
—Elon Musk (@elonmusk) March 22, 2023
Despite phone calls from influential figures, like Elon Muskthat supports Dogecoin, in order for the Federal Reserve to abandon its approach of raising interest rates, the central bank disregarded its advice and raised key interest rates by an additional 25 basis points, following developments involving Silicon Valley Bank and other banking entities .
-KITCO Featured Image