Bitcoin and other cryptocurrencies slid on Friday as investors continued to bail from riskier assets following the Federal Reserve’s promise that it will stay aggressive in its fight against inflation.
“It’s going to be a tough environment for crypto,” Chris Gaffney, president of world markets at TIAA Bank, said in an interview. “Macro continues to be a challenging theme, pressuring both crypto and equities as central banks still tighten in the quest to soften elevated inflation numbers,” crypto lender BlockFi wrote in a note.
Bitcoin’s dominance has waned in recent months amid the selloff. That could be because it’s losing its appeal as an alternative store of value or because more value is being created elsewhere in the crypto ecosystem, according to a note from Charlie Erith of ByteTree Asset Management.Risk assets in general are suffering, says Brian Pellegrini, founder of research firm Intertemporal Economics. “The market is believing the Fed’s rhetoric and all leveraged trades are pulling back,” he said.