Cryptocurrencies in decline ahead of Fed decision

Cryptocurrencies in decline ahead of Fed decision

Cryptocurrencies recorded significant price losses just a few days before the US Federal Reserve's interest rate decision. Bitcoin, in particular, fell just below $62,000 on Monday, representing a loss of over $1,000 compared to the previous day. This marked the lowest level for the most popular cryptocurrency in about a week. Other digital assets such as Ether and XRP also recorded declines at the beginning of the week.

Attention in the crypto market is now increasingly focused on the Federal Reserve's upcoming interest rate decision. Investors are cautious as monetary policy signals are expected, even if a direct change in policy is not expected immediately. The question of whether and when the Fed will loosen its tight monetary policy remains. Given the ongoing inflation, possible interest rate cuts by the Fed are being viewed critically, as current expectations only include a limited reduction by the end of 2024.

The Federal Reserve's interest rate policy plays a significant role in the crypto market because digital assets are considered extremely risky and, unlike investments such as government bonds, which are considered safe, do not generate ongoing income such as interest. Falling interest rates are usually seen as positive for the crypto market. Given these factors, market developments ahead of the Fed's interest rate decision remain important as they could potentially have a strong impact on cryptocurrencies.