Bitcoin falls over 7% following Fed policy notes and jobless rate hike

Bitcoin falls over 7% following Fed policy notes and jobless rate hike

Digital assets continued to fall on Thursday along with the equities market amid expectations that the Federal Reserve would pull back on economic stimulus sooner than expected in an attempt to curb soaring inflation.

Bitcoin fell over $3000, or 7.44%, to 43,057, while Ethereum declined 10.67% and Binance Coin fell 7.46%. The selloff was felt across all markets as the S&P 500 declined 0.43% and the Nasdaq fell 0.90%. Tesla, Netflix and Advanced Micro Devices were among the Nasdaq’s biggest losers.

Minutes from the Federal Reserve’s December meeting released on Wednesday showed the central bank was preparing to cut back on economic stimulus faster than expected. Shortly after, the announcement sent crypto and stock prices tumbling.

Policy makers discussed reducing the Fed’s balance sheet in another move to reverse its COVID-19 measures. Meanwhile, jobless claims totaled 207,000 for the week ended Jan. 1, exceeding economists expectations of 195,000 claims.

In DeFi markets, Terra was down 9.5%, Uniswap down 13.9% and AAVE was down 13.20%. Metaverse tokens declined with Axie Infinity down 16.2%, The Sandbox down 7.0% and Gala down 9.6% over the past 24 hours.

Stablecoin dominance rose sharply following the release of Fed officials’ discussions about the direction of the economy and interest rates last month. USDC dominance was up 1.97%, USDT dominance up 1.56% and UST dominance up 1.51%.

Total crypto market cap was down 1.61% at 2.03T. Top market cap gainers over the past 24 hours included Baby Doge Coin up 20.17%, Cratos up 4.19% and Decentralland up 1.89%. In equities, bank stocks were up including Bank of America, Citigroup and Wells Fargo.