Global Crypto Markets Enter Panic Mode Ahead of Fed Meeting Decisions

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Global Crypto Markets Enter Panic Mode Ahead of Fed Meeting Decisions

Crypto markets are anxiously awaiting news on policy, even as the Fed meeting holding today will begin discussions at 2 pm Eastern time. And with the discussions expected to be centered around inflation, interest rates, as well as purchase tapering, crypto markets are all running already, despite all the uncertainties.

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Cryptocurrencies Under Pressure Ahead of Fed Meeting

Per data from MarketWatch, Bitcoin, BTCUSD, -2.67% has dipped more than 30% from its November all-time high of $68,000, presently trading at $47,001 at press time. Ether, ETHUSD, -3.48% is also down by more than 20% from its record high of $4,865.6, trading at $3,720 at the time of writing.

The shadow of uncertainty has not left out, the altcoin markets. In fact, the panic might even be more pronounced here. Even Dogecoin (DOGE) that is still reeling from the publicity of TESLA, is down 9% on the day.

Interestingly, of all the top 10 cryptocurrencies by market capitalization, only Solana (SOL) is not in the red zone on daily timeframes.

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Stock Markets Not Doing Any Better

Meanwhile, the U.S. stock market also seems to be under some sort of pressure ahead of the much anticipated Fed meeting. While the S&P 500 SPX, -0.20%  was down 34 points, or 0.7%, at 4,634, the Dow Jones Industrial Average DJIA, 0.06%  fell 83 points, or 0.2%, to 35,565 Tuesday afternoon. The S&P 500 SPX, -0.20%   was down 34 points, or 0.7%, at 4,634. The Nasdaq Composite COMP, -0.85% has also dropped 177 points, or 1.2%, to 15,236.9.

Now, a major cause of concern for crypto enthusiasts has been about the Fed tapering, but what does it mean exactly? Tapering does not mean selling the assets purchased, as most people like to think. It is only an indication of tighter monetary policy, that is, a precursor to higher interest rates.

While tapering affects debt, it surely can have multiple effects on the U.S. and emerging stock markets.

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What Are Experts Saying?

Global head of sales and trading at Eqonex exchange, Matt Blom gave his opinions in a Tuesday note. He insists that the Fed meeting is not likely to affect major cryptocurrencies in any negative way. According to Blom,

“If the Fed should delay the taper, even against all expectations, then it would be a fast rally for Bitcoin. He then gave a second scenario, that it could be that the Fed taper is also already priced in. If that is the case as well, then there’s no indication of higher interest rates. Therefore, a rally is still the most likely outcome for Bitcoin.”

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Mayowa Adebajo

Mayowa Adebajo is a fintech enthusiast with a decade-long experience writing news stories and creating content generally. When he's not writing, he's either talking politics or discussing sports.

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