Bitcoin slumped about 8% on Friday as markets and investors took in Fed comments that suggested a dovish pivot remained unlikely to happen soon.
The crypto traded at $21,438 Friday at 8:30 a.m. ET, and the decline of $1,751.40 marked its biggest single-day drop in a month, according to CoinDesk data. Friday’s move also continued a five-day decline for the world’s biggest cryptocurrency, which hovered near $25,000 before the sell-off. On the year, bitcoin has dropped over 54%.
Meanwhile, ether dropped nearly 10% over the last 24 hours, trading at $1,690.38. Similar to bitcoin, the token has shed approximately 55% in 2022.
The crypto retreat mirrored an overall risk-off trend, with stocks also selling off, after Fed officials dashed hopes for relief from rate hikes anytime soon.
St. Louis Fed President James Bullard said he’d prefer a 75-basis-point hike next month, which would mark the third straight increase of that size, and said he isn’t ready to say inflation has peaked.
“We should continue to move expeditiously to a level of the policy rate that will put significant downward pressure on inflation,” Bullard told the Wall Street Journal Thursday.
Also on Thursday, San Francisco Fed President Mary Daly told CNN that a September rate hike of 50 or 75 basis points would be “reasonable” and predicted increases will continue into at least 2023, pushing back against calls for a dovish pivot by then.
Meanwhile, the US dollar index notched a fresh one-month high Friday as the central bank signaled its committement to more rate hikes.
As investors pile into the safe haven, the index moved above 107, it’s highest since July 18 and on pace for the largest weekly gain since March 2020.
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