Bitcoin Drops Nearly 11% This Friday With Fed and Russian Government Proposal

Bitcoin melted this Friday (21), as investors dismantle their portfolios in riskier assets, since the Fed (Federal Reserve, Central Bank of the United States) signaled that it could relax economic stimulus more aggressively than the expected.

According to Refinitiv, around 18:50, Brasília time, the digital currency was quoted at US$ 37.40, with a devaluation of 10.78%.

The Federal Open Market Committee (FOMC) of the US central bank announced three rate hikes in 2022 and three more rate hikes in 2023. When rates rise, fixed income becomes more attractive and variable income lose space.

“Although we are at the same level as a year ago, market sentiment is the opposite. While investors believed at the beginning of 2021 that cryptocurrency could grow, today, the market fears that the asset will devalue”, comments Caio Villa, investment director at crypto exchange Uniera.

But the expert says that this is one of the best times to buy the cryptocurrency, “when bitcoin is falling, good entry points arise”.

Cryptocurrencies under review

Another point that also contributes to the fall of cryptocurrency is the repression by several governments. Last Thursday (19), Russia’s central bank proposed banning the use of mining assets.

The country is one of the largest cryptocurrency mining nations in the world, but its central bank has said that digital assets could pose a threat to the country’s financial stability.

The Russian policy emerged months after China banned both trading and mining of bitcoin.

As such, the most valuable cryptocurrency in the world has already dropped by more than 10% in the last seven days.

and information from Diksha Madhok of CNN Business