Crypto Market Plummets as Interest Rate Hikes and Fed Uncertainty Spark Panic Selling

The cryptocurrency market took a sharp decline on Sunday evening, with Bitcoin plummeting to levels not seen since February. The price drop was significant, with Bitcoin down 12% in 24 hours and 20% week-over-week.

Ethereum also suffered a major loss, falling back to December prices and erasing all its 2024 gains. It's now 3% lower than on January 1st.

The market downturn is attributed to the Bank of Japan's interest rate hike last week, which led to a surge in the yen and a subsequent drop in the Nikkei stock index. The Fed also threw a curveball by holding rates steady but seeming iffy about a September cut, which had been widely expected.

Markets are in full panic mode, with traders pricing in a 100% chance of lower U.S. rates in September and a 71% chance of a 50 basis point cut. The 10-year Treasury yield has also nosedived, sitting at 3.75% Sunday evening, well below the fed funds target.