Cryptocurrency market loses billions in anticipation of Fed rate hike

Digital asset markets are losing ground as investors await the US Federal Reserve’s response to the worst performance of major stock indices since 1971.

Analysts at Reuters and the Dutch ING Group believe that on May 4, the markets will see a big jump in quotes, as Fed Chairman Jerome Powell will announce a 50 basis point (0.5%) rate hike.

The US indices Nasdaq, S&P 500, NYSE and the Dow Jones showed a significant decline at the end of the week. The Nasdaq posted its worst quarterly results since 1971. The capitalization of the cryptocurrency market has decreased by almost 9% compared to March 2022. As of today, the market is in the «red zone» — the price of cryptocurrencies has fallen.

At the same time, according to the analytical research platform Arcane Research, investors are actively accumulating bitcoins, and the share of BTC supply fell to 64% over the year.