Crypto Market Plunges Amid Fed Rate Hike Fears and Tech Stock Sell-Off

The crypto market has experienced a significant decline over the past 24 hours, dropping to $2.24 trillion in value. Bitcoin and Ethereum have led the way down, with prices falling 2.7% and 3.2%, respectively. The drop is not limited to cryptocurrencies, as stocks are also facing heavy selling pressure.

One of the main reasons for the decline is the anticipation of a Fed rate hike. Traders are becoming increasingly worried that the Federal Reserve will raise interest rates instead of keeping them unchanged. This has led to a surge in expectations, with the CME Fed Watch tool showing a 37% chance of a 25-basis-point hike.

The higher rates can have a negative impact on crypto and growth stocks, as investors may prefer safer assets that offer better returns. The sell-off is also spreading through technology and semiconductor stocks, with South Korea's KOSPI index plummeting more than 10%. Major chipmakers such as Samsung and SK Hynix are facing heavy selling pressure.

The weakness in AI-linked stocks has raised fresh concerns about the speed of investment growth. Investors have poured huge amounts of money into AI infrastructure, but the market is now questioning how quickly those investments will generate returns.