The stocks and BTC, and other cryptocurrencies crashed after the US Treasury Secretary Janet Yellen said that we can expect to rise in the US Interest rates so let’s find out more in our latest crypto news.
Janet Yellen talked about a rise in the US Interest rates and she initiated a quick panic episode on the crypto markets. The panic episode caused the markets to close the day with red candles and we saw even stocks and BTC, and the rest crash on the market. In a videoconference with The Atlantic, Janet Yellen signaled that Biden’s administration could raise the interest rates as a way to save the economy after the imbalance that was caused by measures to combat the COVID pandemic.
When asked about what actions will stimulate the economy after the crisis, Yellen explained that they are considering reallocating some investment and changing policies that could lead to a rise in interest rates. She was emphatic however in pointing out that changes will be modest.
It could be that the interest rates will have to rise a little and make sure that the economy doesn’t overheat with the additional spending which is small relative to the size of the economy. It could even cause a few increases in the interest rates because these are investments that have to be competitive and productive. When the interest rates go up, the investments in fixed income products are becoming more attractive and they also tend to absorb capital from people that are moving out of alternative assets like crypto.
The reactions after the statement didn’t take too long to come as the market dropped from $2.3 trillion to $2.1 trillion in two hours. It is now standing at $2.2 trillion after a small recovery. BTC dropped back below $55K and lost $3500 in a few hours which could signal that the bulls are tired and are canceling out the gains of the past 5 days. Other cryptos felt the pain and ETH went down 5.58%, BNB lost 10%, XRP crashed by 10.74%, ADA dropped by almost 7% and DOT dropped by 6.7% DOGE was the only coin that raised by a staggering 26.35% gains.
The S&P 500 dropped by 1.3% and did recover later a little, closing the day with a red candle of 0.67%. this could be a first since March when the indexes closed below EMA50.
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