Ethereum has fallen further than other blue-chip cryptocurrencies after the Federal Reserve raised interest rates by 75 basis points on Wednesday.
The world’s second-largest cryptocurrency by market cap has been sliding in value since successfully transitioning to a ‘proof of work’ method for validating blockchain transactions.
In the run-up to Wednesday’s announcement, the entire crypto market had reacted with caution at the prospect of a Federal Reserve target benchmark inflation rate of between 3% and 3.25%.
Check: Crypto live prices
After Federal Reserve chair Jerome Powell announced at Wednesday’s meeting of the FOMC (Federal Open Market Committee) the crypto-market dipped modestly, but ethereum slid furthest among blue chips, falling by almost 4%.
The combined market capitalisation of the entire cryptocurrency market is now $957bn (£847bn), having dipped below the psychological level of $1tn.
Bitcoin (BTC-USD) remained unchanged after the news, but it has still fallen almost 7% in the last seven days to $18,885, as of the time of writing.
But, the blue-chip cryptocurrency that fell the most was ethereum (ETH-USD), falling almost 4% in the last 24 hours and down 22% in the last week, to $1,275.
The price of the second largest crypto by market value has been tumbling in the aftermath of last week’s merge to a proof of stake consensus mechanism.
Read more: Terraform Labs, Why South Korea has asked Interpol to find Do Kwon
This landmark technological overhaul of the Ethereum network did little to boost the value of ether, the blockchain’s indigenous cryptocurrency.
The next stage of Ethereum’s development is next year’s “Shanghai” upgrade, which will allow users to withdraw the ether that they have staked in the proof of stake mechanism.
Read more: Ethereum price drops 20% as SEC declares control over network
The Fed’s aggressive rate hikes have been enacted in a bid to combat rising inflation.
The Federal Reserve’s hike brings the interest rate to its highest point since 2007.
Fed Chair Jerome Powell vowed at the Wednesday meeting to “keep at” the battle to beat down inflation.
He also made a sobering new set of forecasts that could see the federal fund rate rising at a faster pace and to a higher level than expected.
The chair of the Federal Reserve also suggested that unemployment in the US was rising to a degree historically associated with recessions.
Watch: ‘Digital assets will be as big as the internet itself’: Senator Cynthia Lummis
[embedded content]
,,,
