Bitcoin, Ether extend crypto selloff as big Fed rate hike looms

An Ether jump since mid-June that was spurred by hype around an upgrade of the Ethereum blockchain is rapidly unwinding

Cryptocurrencies continued to fall on Monday, which was prevented by the further fall of the second largest token Ether, as well as the prospect of a global wave of monetary policy tightening this week, covering the United States and Europe.

Ether fell by as much as 5.6% to a two-month low and was trading around $1,302 as of 10.35 am in Singapore, while bitcoin lost about 5% and dropped below $19,000. Tokens such as XRP, Avalanche and Polkadot have suffered more serious losses.

The jump in ether since mid-June, caused by the hype around the Ethereum blockchain update, is rapidly unfolding after the update is completed. Meanwhile, investors are preparing for volatility due to the large-scale interest rate hike expected this week by the Federal Reserve to combat price pressure.

Updating Ethereum – merging – to reduce energy consumption is a “huge shift,“ but "in this inflationary environment, macro trumps everything,” Anthony Trenchev, managing partner of crypto lender Nexo, wrote in a note.

This is reflected in the pressure on a number of assets: global stock indexes are close to nullifying the growth since mid-June, which for many was a bear market rally. US stock futures were in the red on Monday, while the dollar indicator rose.

Elsewhere, reports that Ripple Labs and the U.S. Securities and Exchange Commission are seeking an immediate resolution in a court case over the XRP token affiliated with Ripple led to the latter losing as much as 12 percent. The SEC claims that Ripple was “reckless” in its claims that XRP is not a regulated security.