Crypto market treads water before Fed minutes

Musk-induced Dogecoin surge wanes

The US Federal Reserve is due to make an interest rate decision – Photo: Shutterstock

Total cryptocurrency market capitalisation fell by 1.5% in the 24 hours to 13:00 (UTC) on Wednesday, as investors and traders waited for a decision on interest rates at the US Federal open market Ccommittee (FOMC) meeting.;

According to CoinMarketCap, the sector’s total market capitalisation stood at $1trn (£870bn), having started the year at $2.18trn. 

The Federal Reserve is expected to raise interest rates by 75 basis points when the FOMC meeting concludes on Wednesday afternoon. Having reduced interest rates to record lows and provided unprecedented levels of market support during the Covid-19 crisis, the central bank has raised rates to combat runaway inflation. 

Reports emerged in recent weeks that Fed officials, fearful of plunging the world’s largest economy into a deep recession, will soon end their hawkish turn. 

Like cryptocurrencies, equities trod water on Wednesday, waiting for information from the FOMC.  The FTSE 100 and Euro Stoxx 600 both traded down by 0.3%. 

Bitcoin and Ethereum slip

Bitcoin was 0.6% lower at $20,419, having started the year at $46,310. The world’s first and largest cryptocurrency has seen its market capitalisation rise from $327bn to $391bn in the past month. 

Ethereum was down by 2.3% at $1,555, having started 2022 at $3,683. The second-largest cryptocurrency by market capitalisation has risen from $160bn to $190bn in the past month. 

Among the other prominent cryptocurrencies, Litecoin and Toncoin enjoyed some of the largest gains, rising by 9.2% and 4.5%, respectively. The Sandbox and Terra Classic experienced some of the worst losses, falling by 7.8% and 7.3%, respectively. 

Dogecoin traded down by 7.4% at $0.1298. The meme-inspired cryptocurrency doubled in price in the previous seven days after one of its most vocal supporters, Elon Musk, purchased the social media platform Twitter.

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