Bitcoin tracks stocks lower on discouraging Fed, Treasury comments on banks

by James · March 22, 2023

Bitcoin fell on Thursday morning in Asia along with most other top 10 non-stablecoin cryptocurrencies. XRP led the losers, while Litecoin gained. U.S. stocks fell after the Federal Reserve raised interest rates as expected on Wednesday, but later said rates could be higher for longer, while the Treasury retreated from a blanket backstop for troubled banks. A lawsuit against crypto entrepreneur Justin Sun and a warning to the Coinbase exchange about some of their betting products.

See related article: Bitcoin took off as bank busts spooked investors

Fast facts

Bitcoin fell 2.53% in the last 24 hours to USD 27,355 at 09:00 a.m. in Hong Kong, but still had a 12.55% gain over the past seven days, according to CoinMarketCap data. The world’s largest cryptocurrency hit a nine-month high of $28,803 before the slide that followed the Fed’s latest rate hike and hawkish comments.
Ether fell 2.85% to $1,739, but is still up 5.6% over the seven days.
XRP was the biggest loser in 24 hours, falling 8.66% to $0.4219. However, it is also still up for the week by 17.57% after a surge in recent days on optimism that the SEC lawsuit involving the token is nearing resolution.
Litecoin was the only top 10 non-stablecoin cryptocurrency to record gains in the last 24 hours. The token rose 6.07% to $86.63 for a weekly gain of 13.32%.
On Wednesday, the US SEC sued Justin Sun and three of his companies – Tron Foundation Limited, BitTorrent Foundation Ltd. and Rainberry Inc. (formerly known as BitTorro) – for the sale and offering of Tronix (TRX) and BitTorrent (BTT), which were described by the SEC as unregistered “crypto asset securities”. It also accused the above of fraud and market manipulation, and sued eight celebrities for illegally promoting TRX and BTT, including Lindsay Lohan and Jake Paul.
US-based crypto exchange Coinbase is facing another potential lawsuit from the SEC after receiving a Wells notice that said the exchange violated securities laws, adding to the ongoing conflicts between Coinbase and US regulators.
The total crypto market cap fell 2.31% in the last 24 hours to $1.15 trillion. Total trading volume in the last 24 hours increased by 1.75% to USD 68.93 billion.
US stocks closed down on Wednesday. The Dow Jones Industrial Average fell 1.63%, the S&P 500 fell 1.65%, and the Nasdaq Composite Index lost 1.60%.
The US Federal Reserve on Wednesday raised its target range for US interest rates by the expected 25 basis points to 4.75% to 5%, the ninth rate hike since March 2022.
The Fed reaffirmed its goal of keeping annual inflation below 2%, and investors expect more rate hikes throughout the year, compared to earlier speculation of a pause due to failures and weaknesses in the banking industry. The US consumer price index (CPI) rose 6% from a year earlier in February, down from 6.4% in January, but still well above the Fed’s target of 2%.
Adding to concerns, US Treasury Secretary Janet Yellen told a Senate Appropriations subcommittee that she had not considered or discussed a “blanket insurance or guarantee” for all US bank deposits, according to Reuters.
Ahead of the opening of US stock markets on Thursday, US stock futures were slightly higher as of 09:00 in Hong Kong. Dow Jones Industrial Average futures rose 0.15 percent. S&P 500 futures rose 0.12%. The Nasdaq Composite Index rose 0.09 percent.