Bitcoin Falls Below $19K, Nears 2022 Low as Fed Worries Weigh

Bitcoin fell below $19,000 on Wednesday, near yearly lows, as growing fears of a hawkish Federal Reserve drove investors away from cryptocurrencies.

The world's largest cryptocurrency fell more than 5% to $18,764 as of 01:56 ET (05:56 GMT), its lowest level in nearly three months. The token is currently trading around $1,000 above its yearly low. The weakness in Bitcoin has spread to the broader cryptocurrency market, with the total crypto market capitalization falling back below $1 trillion. The market has lost nearly $2 trillion so far this year as rising interest rates and high inflation unwound the biggest crypto bets. Bitcoin's recent losses follow strong US employment and service sector data that signaled some resilience in the world's largest economy. This also gives the Fed more room to raise interest rates quickly. Data from CME Group showed that traders are pricing in a more than 70% chance of the Fed hiking rates by 75 basis points later this month. Bitcoin and the broader crypto market have been among the assets most affected by rising interest rates as the Fed began to unwind its two-year COVID-era accommodative monetary policy. Loose money faucets and high liquidity were the biggest factors behind crypto's spectacular rally over the past two years. But with interest rates rising, investors are hesitant to pour capital into the space. Sentiment towards crypto has also been marred by a series of high-profile bankruptcies this year, notably at hedge fund Three Arrows Capital and crypto lender Celsius. Recent losses in Bitcoin have also greatly reduced the profitability of token mining. This has encouraged most major miners to sell to cover their positions, resulting in further losses for the token. Follow Global Economic Developments on Social Media! Click here to follow Ieconomy official Facebook account! Click here to follow Ieconomy official Instagram account! Click here to follow Ieconomy official Twitter account!