The cryptocurrency market saw a significant decline today, with Bitcoin down 3% to $41,500 on growing concerns about monetary tightening in the US, with the Federal Reserve announcing a possible rate hike in the first quarter of the year.
Ethereum was also affected, falling 2.5% to $3,200, with concerns about a possible delay in the network’s upgrade to Ethereum 2.0.
Altcoins such as Solana and Cardano recorded declines ranging between 4-6% due to temporary capital flight to safer assets such as the US dollar and gold. Reports from Glassnode indicate that outflows from exchanges increased by 12%, indicating the possibility of investors turning to long-term storage.
CoinDesk highlighted the effects of statements by Jamie Dimon, CEO of JPMorgan, who described cryptocurrencies as unsustainable in the long term.
As for Binance, one of the largest cryptocurrency exchanges, it has not issued an official statement on this decline. However, the platform published an analytical article explaining that the main reasons behind this decline include the rise in US bond yields, which prompted investors to move away from riskier assets such as cryptocurrencies, in addition to profit-taking after a previous rally.
