The cryptocurrency market was hit hard with losses as a result of Jackson Hole remark made by Jerome Powell, head of the Federal Reserve (Fed), in which he hinted that the Fed may keep hiking interest rates significantly over the next several months. After being above the level for more than a month and a half, the market valuation of cryptocurrencies dropped below the $1 trillion threshold.
“Although lower inflation will result from higher interest rates, stagnant economic growth, and more favourable labour market circumstances, families and companies will nonetheless feel the negative consequences of these factors. These are the unavoidable expenses associated with lowering inflation. However, if we are unable to successfully reinstate price stability, we will experience much more suffering “Powell stated while speaking at the economic symposium in Jackson Hole.
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The statement caused a significant reaction throughout the world’s financial markets, but the effect was felt most strongly in the cryptocurrency sector. According to statistics from coinmarketcap.com, the total market cap of all cryptocurrencies dropped by almost $50 billion from $1.04 trillion on August 26 to $953 billion on Monday. This represents a drop from the previous high of $1.04 trillion.
Bitcoin, the most valuable cryptocurrency in terms of market capitalization, dropped below $20,000. As of one o’clock on Monday afternoon, the price had increased to $19,887. On August 26, it reached a daily high of $21,800 before falling to a day’s end price of $20,199.
On Monday, the price of Ethereum, the second most valuable cryptocurrency, was 1,453 dollars. According to the statistics from the market, before to Powell’s address on Friday, it had been trading at $1,689.
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Other prominent cryptocurrencies, such as Solana and Avalanche, have seen losses of 13% and 20%, respectively, during the course of the last week.
Bitcoin, on the other hand, has maintained its position as the dominant cryptocurrency in the market. It continues to retain more over 39 percent of the market share for all cryptocurrencies combined. Ethereum has a market share that is close to 19 percent of the whole amount.