5 Cryptocurrency Stocks in Focus Amid Growing Economic Uncertainty
The price of Bitcoin (BTC) plummeted from its July high of $31,500 and was hovering around $26,100 on Aug 28. In fact, the Bitcoin price dipped below $26,000 at one point on Monday amid a recent bearish sentiment among cryptocurrency traders.
Multiple reasons have been denting the sentiments of cryptocurrency traders, with no new catalyst to drive the markets. Monday’s decline follows Federal Reserve Chairman Jerome Powell’s speech at the Jackson Hole Annual Policy Symposium. Powell, on Aug 25, maintained his hawkish stance, saying that inflation remains elevated from the Fed’s target level of 2% and more interest hikes would be required to pull it down.
Crypto Rally Comes to a Halt
Following Powell’s speech, all major cryptocurrencies like Bitcoin, Ethereum (ETH), Litecoin (LTC) and Dogecoin (DOGE) took a hit on Monday. Ethereum and Litecoin were hovering around $1,650 and $65, respectively.
Understandably, market participants are worried as they are yet to get a clear picture of how the Fed plans to go ahead with its interest rate hike campaign. Higher interest rates negatively impact growth-oriented assets, such as consumer discretionary and technology stocks, along with cryptocurrencies.
The sudden bearish sentiment among crypto traders comes after a solid rally in cryptocurrencies in the first half of the year. Cryptocurrencies had an unimpressive 2022 owing to a series of unfortunate events like the bankruptcy of FTX, but the rebound this year has been solid.
The past month has seen a number of unfortunate events. Earlier this month, credit rating agency Moody’s downgraded several U.S. banks and kept half a dozen banks on review for potential downgrades.
Also, last week, S&P 500 Global Rating downgraded five regional banks. This has raised fears about the health of the country’s banks, bringing the crypto rally to a standstill.
However, experts still believe that the cryptocurrency market has immense potential and will rebound as the macroeconomic factors improve.