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Friday, June 17, 2022

Cryptocurrency Meltdown

Why Cryptocurrencies Have Gone from the Next Hot Thing to a Full-on Meltdown    June 17, 2022 5:00 AM ET,  David Gura    in npr

 The cryptocurrency world is in chaos.  Just months ago, crypto companies were advertising heavily during the Super Bowl after virtual currencies enjoyed a dizzying rally in 2021.

Today, Bitcoin and other cryptos are plunging, and companies such as Coinbase, which runs the largest crypto exchange in the U.S, are announcing layoffs.

"The crypto house is on fire, and everyone is just rushing to the exits because there is a complete loss of confidence in the space," says Ed Moya, a senior markets strategist at financial firm Oanda.

Here's what's going on. Why are cryptos falling so sharply?  Because they are being hit by the same factors impacting stocks and other assets.

Consumer prices are surging at the fastest annual pace in over four decades, and the Federal Reserve is hiking interest rates aggressively to bring down inflation.

On Thursday, the Fed raised rates by three-quarters of a percentage point and indicated it could raise them again by the same amount at its next meeting in July if needed to cool down prices.  .... ' 

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