SINGAPORE – Cryptocurrencies began Monday in the red, hampered by a further drop in the second-largest token Ether as well as the prospect of a global wave of monetary tightening this week spanning the United States to Europe.
Ether fell as much as 3.3 per cent to a two-month low and was trading around US$1,350 as at 9.14am in Singapore, while Bitcoin retreated below US$19,500. Tokens like XRP, Avalanche and Polkadot posted heavier losses.
An Ether jump since mid-June, spurred by hype around an upgrade of the Ethereum blockchain, is rapidly unwinding now that the revamp is done.
Meanwhile, investors are bracing for volatility from the jumbo interest rate hike expected this week from the Federal Reserve to fight price pressures.
The Ethereum update – called the Merge – to slash energy usage is an enormous shift but “in this inflationary environment, macro trumps everything”, Mr Antoni Trenchev, managing partner at crypto lender Nexo, wrote in a note.
This is evident in the pressure on a range of assets – global stocks are closer to wiping out a climb since mid-June that for many was a bear market rally.
Elsewhere, reports that Ripple Labs and the US Securities & Exchange Commission (SEC) are seeking an immediate ruling in a court case over Ripple’s affiliated token XRP saw the latter shed as much as 9.6 per cent.
The SEC argues that Ripple was “reckless” in its claims that XRP is not a regulated security. BLOOMBERG