Bitcoin, Ether crash by over 10% in 24 hours amid US fed rate hike concerns

Prices of Bitcoin (BTC) and Ether (ETH), two of the world’s largest cryptocurrency tokens, fell by up to 10% over the past 24 hours, as of the early hours of Monday, September 19. The fall in the prices of the world’s largest crypto tokens come amid volatile market conditions, including price control measures by the US federal government and bear market trends in the Indian market — stemming an upsurge in the prices of crypto tokens buoyed by Ethereum’s Merge. 

From around $20,130 on Sunday, September 18, BTC fell to around $18,500 on Monday noon — a drop of around 8% in the past one day. ETH, meanwhile, fell from $1,465 to $1,297 during the same time frame, thus dropping by around 11.5%, according to crypto market tracker, Coinmarketcap. 

The latest crash over the past 24 hours further wiped out the gains made by BTC and ETH over the past three months, following steep declines from the highs scaled by the global crypto market since November last year. After falling to around $17,800, BTC recovered to near $25,000 on August 15. ETH, after falling below $900, briefly rallied to above $2,000 on the same day. 

Prices, however, have fallen by nearly 30% for both BTC and ETH, since then — putting a halt to ETH’s rise buoyed by its much awaited Merge upgrade. 

After crossing a behemoth high of $3 trillion market cap value in November last year, the global crypto crash wiped out over 70% of the market value of traded tokens. While the global market cap had recovered to over $1 trillion in June this year, global volatility meant that tokens failed to retain the market cap benchmark — which has eventually fallen to below the level over the past two weeks. 

Merge, which officially took place in the early hours of September 15, has been tipped by global stakeholders in the crypto industry to make the Ethereum blockchain more valuable and attractive to investors. The shift saw Ethereum move from a proof of work (PoW) mechanism to proof of stake (PoS), which selects validators on the blockchain based on the amount of tokens they have ‘staked’ (or deposited as collaterals). 

Among other factors, Merge was tipped to reduce the energy consumption of the Ethereum blockchain by over 99%, thus resolving one of the biggest points of criticism for blockchains globally — energy consumption. 

According to reports, however, a host of global factors linked to commodity price hike concerns around the world, as well as general economic uncertainty, has overshadowed the apparent benefits of the two biggest cryptocurrencies of the world. 

Experts, including Bloomberg Intelligence’s Mike McGlone and independent crypto analyst Kevin Svenson, have opined (via Cointelegraph) that the US federal interest rate hike is likely to deal a “sledgehammer” blow to the crypto market in the coming weeks. The interest hike could lead to a weak equity market globally, which in turn may see prices crash — wiping out the temporary gains that BTC and ETH had made over the past one month.