The crypto market suffered heavy losses on Saturday and Sunday after Federal Reserve (Fed) Chairman Jerome Powell signaled that he may continue to raise interest rates sharply in the coming months. The crypto market capitalization has fallen below the $1 trillion mark after remaining above the mark for more than a month.
“While higher interest rates, slower growth and weaker labor market conditions will reduce inflation, they will also hurt households and businesses. These are the unfortunate costs of reducing the inflation. But a failure to restore price stability would mean much more pain,” Powell said at the Jackson Hole Economics Symposium.
Global stock markets reacted strongly to the announcement, but the impact was more pronounced in the crypto market. According to data from coinmarketcap.com.
Bitcoin, the largest cryptocurrency by market cap, fell below $20,000. As of 1 p.m. Monday, it was trading at $19,887. On August 26, it hit a high of $21,800 before closing at $20,199.
Ethereum, the second largest cryptocurrency, was at $1,453 on Monday. Prior to Powell’s speech on Friday, it was trading at $1,689, according to market data.
Solana and Avalanche, the other top cryptocurrencies, are down 13% and 20% respectively in the past seven days.
However, Bitcoin’s market dominance has remained constant. It continues to hold over 39% share of the total crypto market. Ethereum holds nearly 19% of the total market share.