A sharp decline swept the cryptocurrency market on Monday, with fears of a wave of monetary tightening set to extend from Europe to the United States this week.
According to Arab Net, Bitcoin is on the cusp of its lowest level since 2020, dropping 7.4%, and trading at $18,370 as of 7:45 am in London. Ether is down as much as 6.6%, as it struggles to hold the $1,300 level. Coins such as XRP and Polkadot also posted larger losses.
Investors are bracing for the fluctuations in interest rate hikes by the Federal Reserve expected on Wednesday to combat inflation pressures. High borrowing costs are depleting the liquidity on which the cryptocurrency sector depends.
US stock futures were in the red, and the dollar gauge rose in signs of broader caution.
Ether, the second largest token, has fallen to a two-month low, after seeing a jump since mid-June, spurred by hype about upgrading its blockchain network (Ethereum) to cut power usage.
Ripple Labs' XRP was among the biggest losers, dropping by 13.5%. This came amid reports that the company and the US Securities and Exchange Commission would prefer an immediate ruling in a lawsuit over XRP.
The market capitalization of crypto-tokens has fallen by more than $70 billion in the past 24 hours to $941 billion, a number a far cry from the peak of $3 trillion in 2021, according to CoinGecko figures.
Tight monetary policies and the fall of leveraged crypto companies have led to significant price drops this year.
