The second-largest cryptocurrency and the prospect of a wave of monetary tightening across Europe and the US hampered crypto markets on Monday.
The price of bitcoin declined about 5% to fall below € 19,000. The losses were greater for tokens such as XRP, Avalanche, and Polkadot.
As the Ethereum blockchain is upgraded, the hype around the upgrade has begun to unwind, leading to a sharp drop in Ether prices since mid-June. As a result of the jumbo interest-rate hike the Federal Reserve is expected to make this week, investors are bracing for volatility.
According to Antoni Trenchev, managing partner at crypto lender Nexo, “in this inflationary environment macro trumps everything.” Ethereum’s Merge update is a “ginormous shift” to reduce energy use.
As a result, global stocks are closer to wiping out a rally that for many were a bear-market rally since mid-June.
As well, reports that Ripple Labs Inc. and the US Securities and Exchange Commission are seeking an immediate decision on Ripple’s affiliated token XRP caused the latter to fall as much as 12%. It argues that Ripple was reckless in asserting that XRP was not regulated.