The cryptocurrency market is experiencing another turbulent period due to Bitcoin and major altcoins plunging for the third straight day. This downturn follows the Federal Reserve expressing their lack of interest in holding digital assets and adopting a more cautious approach towards future rate cuts.
Investor uncertainty has heightened due to the Fed’s recent announcement, which indicates they don’t consider cryptocurrencies a viable long-term investment option. Their decision to focus on traditional financial instruments instead of embracing cryptocurrencies has added to the fragile state of the market.
Bitcoin, which reached its all-time high earlier this year, has struggled to maintain its value and is currently trading at around $12,000, down from its peak of over $60,000. Other major altcoins have also experienced significant losses, with some losing up to 90% of their value since their peaks.
Experts attribute this latest downturn to various factors such as the Fed’s tapering off its bond-buying program causing a ripple effect across financial markets, including cryptocurrencies. Regulatory scrutiny is another factor contributing to the downturn. Despite these challenges, many in the cryptocurrency community remain optimistic about the long-term potential of digital currencies due to the benefits of DeFi and blockchain technology.
However, it’s crucial for individuals to conduct thorough research before investing in any financial instrument, regardless of its nature or potential returns.
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