Washington: Bitcoin extended its slide into the weekend as the most speculative of assets continues to be hit the hardest while the excesses of the last few years get wrung from global markets.
The largest cryptocurrency by market value approached $40,000 for the first time since late September, bringing its losses since a peak just three months ago to about 42 per cent. Ether, the second-largest digital asset, also declined, while popular DeFi tokens such as Uniswap and Aave remained under pressure into the weekend, Bloomberg reported.
The choppiness comes amid signs that the Federal Reserve is getting ready to combat persistent inflation through the withdrawal of stimulus. Minutes from the central bank's December meeting, published Wednesday, flagged the chance of earlier and faster-than-expected rate hikes as well as a potential balance-sheet rundown. Those actions would remove liquidity from the system, which could dull the shine of high-growth and speculative assets.
"If the Fed is going to be more aggressive, risk assets, including cryptos, are more vulnerable," said Matt Maley, chief market strategist for Miller Tabak + Co.