The value of Bitcoin and other cryptocurrencies fell sharply on January 6th, as did indices on most world stock exchanges.
Namely, the announcement of a more aggressive tightening of the Federal Reserve’s monetary policy in the minutes from the December meeting hit risky assets at the global level.
According to the Coin Desk, Bitcoin was traded for just under $43,200 at 2:59 a.m. Eastern Time, down nearly 7.0 percent from the previous day, CNBC reports.
Other cryptocurrencies also fell. The price of Ether rose by almost 10 percent to $3,452.58.
The sale of cryptocurrencies followed a fall in shares following the release of minutes from the December Fed meeting, in which the central bank hinted at a faster withdrawal of its stimulus monetary policy, including a more aggressive reduction in the number of bonds it holds.
The Fed has also indicated that it may have to raise the reference interest rate earlier than originally anticipated.
Stock markets in red
Asian stock markets weakened as well, and European stock markets are on a downward trajectory, after the writings of the meeting of the US Federal Reserve (FED) in December, which indicates a faster rise in interest rates than expected due to concerns about persistent inflation.
The sale of shares started on Wall Street the same night, as investors concluded from the Fed writings that the central bank will start tightening its monetary policy more aggressively than previously predicted.
The writings state that the “very tense situation” on the labor market and inflation that is not decreasing could require an earlier increase in the reference interest rate than planned and a faster decrease in total Fed assets as a second brake on the economy.
MSCI’s broadest Asia-Pacific stock index, excluding Japan’s, fell nearly 1.5 percent during afternoon Asian time trading, but later made up for some of the losses, Reuters reported.
Australian stocks sank 2.74 percent, at the highest daily rate since the beginning of September 2020, and the Japanese stock market index Nikkei recorded the strongest daily decline since June last year, of as much as 2.88 percent.
China’s most liquid stocks slipped 1.0 percent as the continuation of the Covid-19 epidemic clouded the country’s economic outlook, despite a private-sector poll showing that China’s service industry activity accelerated growth in December.
European stocks also started the day with a decline in value, with futures in the pan-regional index basket Euro Stocks 50 at a large loss of 2.07 percent in early trading.
The German futures index DAKS is down 1.7 percent, and the London FTSE is down 1.43 percent.
On the New York Stock Exchange, the Nasdaq technology index fell by more than 3.0 percent last night, its deepest one-day decline since February, and the S&P 500, whose value fell 1.9 percent, was no better than on November 26. when news of the new omicron strain of the coronavirus first hit world markets.
The Fed’s record also boosted yields on U.S. government bonds, backing the dollar, though the U.S. currency fell slightly against the Japanese yen from a five-year high earlier last week.
According to the data, the dollar slipped 0.21 percent against the yen to 115.86 yen.
The euro weakened slightly against the US currency, by 0.05 percent to $ 1.1307, while the dollar index strengthened by the same percentage against a basket of currencies to 96.228 points.
Spot gold prices fell 0.38 percent to $1,802.91 an ounce as rising yields on U.S. bonds reduced the luster of the precious metal.