Bitcoin crashes by 8% due to uncertainty about new measures

New comments from Federal Reserve chairman Jerome Powell suggest that the central bank will accelerate its bond-buying program.

Bitcoin price crashes by 8%

The problems of the Bitcoin market are still not over. The price has crashed again today by more than 8 percent to about $46,000.

Last week it was news that Chinese real estate developers Evergrande and Kaisa were unable to meet their payment obligations, causing stocks and crypto markets to collapse. Today it seems a different reason.

Now there are many concerns about whether the Federal Reserve its plans to phase out the bond-buying program more quickly. This is due to high inflation. The Fed may want to complete this as early as March, rather than June. The impact was evident Monday in crypto and traditional markets. The worldwide concerns about the Omicron variant also affect the market.

The Ethereum price is also having a hard time today. At the time of writing, the price of 1 ETH token is around $3,770. That is more than 9 percent lower than a day ago.

Even exchange-traded products linked to crypto assets, such as the Grayscale Bitcoin Trust (GBTC) and ARK Innovation ETF (ARKK), fell 4% and 3%, respectively.

The traditional markets also did not fare much better. Since opening Monday morning, the New York Stock Exchange Composite has fallen 124 points, or 0.75%. The NASDAQ fell 0.85%.

Major concerns about Omicron

Economists say they expect the Fed to begin winding down the bailout package sooner, which would lead to an early termination of government bond-buying programs and mortgage-backed mortgages.

If that were the case, purchases would end in March instead of June. But now there are signs that Fed officials may be taking the omicron variant of the COVID-19 virus more seriously than the delta variant.

“Increased concerns about the virus could reduce people’s willingness to work personally, which would slow progress in the labor market and amplify supply chain disruptions,” Fed Chair Jerome Powell wrote, in comments intended for a statement. Tuesday appearance before the Senate Banking Committee.

It remains to be seen whether that increased concern will prompt Fed officials to keep bond-buying programs on their original timeline. For now, it appears that investors have been looking to divest risky assets until there is some clarity on the Fed’s monetary policy.

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