Bitcoin drops below $20,000 over concerns on Fed rate hikes

The volatility has come amid uncertainty about the path and magnitude of Fed rate hikes & effect on riskier assets.

Bitcoin extended its drop below $20,000 on Monday as part of a wider cryptocurrency-market retreat, amid concern about the Federal Reserve’s rate-hike path.

The largest token fell as much as 2.3% on Monday to $19,527. That’s on course for a fifth straight day of declines, coming after US stocks fell on Friday following Fed Chair Jerome Powell’s speech at the Jackson Hole conference. The wider crypto market retreated Monday, with the MVIS CryptoCompare Digital Assets 100 Index dropping as much as 2.5%.

“Money is flowing out of risky assets. Crypto followed the sharp adjustment of the U.S. stock market” after Powell’s remarks, said Cici Lu, chief executive officer at consulting firm Venn Link Partners. “Markets didn’t like what he had to say and Bitcoin is resuming as a high-beta asset.”

The $20,000 level acted as support for Bitcoin when it hit lows in recent months, but the cryptocurrency had worked its way higher in recent weeks. Before Saturday, it hadn’t been below $20,000 since July 14 and had even crossed above $25,000 earlier in August.

The gyrations have come amid uncertainty about the path and magnitude of Fed rate hikes, and the effect they could have on riskier assets.

Agencies