Surprisingly high inflation numbers from the US sent many cryptocurrencies into the red over the weekend.
Just before the end of the week came the latest inflation figures in the US, which showed that inflation in May was a surprisingly high 8.6 percent.
That sent Wall Street down sharply with the stock market closed on Friday, which spilled over into the cryptocurrency markets over the weekend.
Unlike the stock market, cryptocurrencies can be traded around the clock every day of the year.
Since Wall Street closed on Friday, stocks have been pointing lower for a large majority of cryptocurrencies.
At around 4 p.m. Norwegian time on Sunday, bitcoin hit the bottom of the weekend, down more than 3 percent for the day, according to CoinMarketCap.
At the time, the value was just over $27,000, and the cryptocurrency could post a drop of nearly 60 percent from November last year, according to Market Watch.
At the same time on Sunday, the world’s second largest cryptocurrency, ether, fell by as much as 6.4 percent on the day. According to Bloomberg, the currency has not depreciated since March of last year.
On Sunday afternoon, both bitcoin and ether brought in parts of the day’s fall, but at around 10pm Norwegian time, both were down about 4 percent.
Sharp decline in Wall Street after sudden jumps in inflation
The decline in the stock and cryptocurrency markets may be due to investors’ concern about how the latest inflation numbers will affect the US Federal Reserve, which will issue a new interest rate decision on Wednesday.
A majority expects Central Bank Governor Jerome Powell to raise interest rates by a new 0.5 percentage point, according to Chief Economist Marius Gunsholt Hof at Handelsbanken.
Some believe the central bank may raise it further, according to Reuters.
Bloomberg Talk to analyst Vetle Lunde at Arcane Research about why bitcoin can fluctuate so much when Wall Street is closed.
The institutional market is now focusing a lot on de-risking, with rising inflation and interest rates as key elements behind de-risking. Lundy says this has undoubtedly had a strong impact on Bitcoin Bloomberg.
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