WASHINGTON (dpa-AFX) - Cryptocurrencies extended losses in the past 24 hours as markets digested the concerns about inflation spotlighted in the minutes of the Federal Open Market Committee held in December.
According to the minutes of the FOMC released on Wednesday, almost all participants judged that the upside risks to the inflation outlook had increased. As reasons for this judgment, participants cited recent stronger-than-expected readings on inflation and the likely effects of potential changes in trade and immigration policy. Other reasons mentioned included possible disruptions in global supply chains due to geopolitical developments, a larger-than-anticipated easing in financial conditions, stronger-than-expected household spending, and more persistent shelter price increases.
The participants also observed that the current high degree of uncertainty made it appropriate for the Committee to take a gradual approach as it moved toward a neutral policy stance. Many participants noted that the Committee could hold the policy rate at a restrictive level, or ease policy more slowly, if inflation remained elevated. Several members remarked that policy easing could take place more rapidly if labor market conditions deteriorated, economic activity faltered, or inflation returned to 2 percent more quickly than anticipated.
The slower-than-expected pace of monetary easing implied in the FOMC minutes dampened crypto market sentiment as high interest rates increase the opportunity cost of holding cryptocurrencies that do not typically yield interest.
Anxiety ahead of the release of the monthly non-farm payrolls data on Friday as well as massive outflows from Bitcoin Spot ETF products in the U.S. also weighed on sentiment.
Overall crypto market capitalization has dropped to $3.26 trillion, registering an overnight decline of 1.97 percent. Only seven of the top 100 cryptocurrencies are trading with gains in excess of a percent on an overnight basis.
Amidst the crypto sell-off, market capitalization of the not-so-volatile stablecoins edged down 0.04 percent to $213.5 billion or 6.54 percent of the overall crypto market.
Market capitalization of the Decentralized Finance category slipped 2.3 percent overnight to $143.99 billion, accounting for a market share of 4.4 percent. Market capitalization of the memes category plunged 5 percent overnight to $96.6 billion, accounting for a market share of 2.96 percent.
Market capitalization of the AI& Big data category also declined 2.85 percent overnight to $50.81 billion implying a market share of 1.56 percent.
The CoinMarketCap 100 Index that measures the performance of the top 100 cryptocurrency projects (excluding stablecoins and asset-backed wrapper tokens) by CoinMarketCap ranking based on their market capitalization is currently at $200.40. The index has ranged between the yearly high of $234.54 recorded on December 17, 2024 and the yearly low of $89.94 recorded on January 23, 2024.
Coinmarketcap's Crypto Fear and Greed Index, a barometer of the emotional state of the market is currently at 49 denoting a 'Neutral' position. It was at 54 (Neutral) a day earlier, at 51 (Neutral) a week earlier and at 83 (Extreme Greed) a month earlier.
Bitcoin has slipped 3.3 percent overnight to trade at $92,146.75, around 15 percent below the all-time high. BTC has shed 5.6 percent in the past week. The 24-hour trading ranged between a high of $95,983.19 and a low of $92,525.84.
According to data from Farside Investors, Bitcoin Spot ETF products in the U.S. witnessed outflows of $569 million on Wednesday as compared with inflows of $52 million a day earlier.
Fidelity Wise Origin Bitcoin Fund (FBTC) topped with highest-ever outflows of $259 million. Ark 21 Shares Bitcoin ETF (ARKB) followed with outflows of $148 million. iShares Bitcoin Trust (IBIT) recorded outflows of $124 million. No ETF recorded net inflows on Wednesday.
Ethereum lost 3.1 percent in the past 24 hours to trade at $3,252.56, around 34 percent below the previous peak recorded in November 2021. Weekly losses are at 7.1 percent. Ether traded between $3,384.95 and $3,209.21 in the past 24 hours.
Ethereum Spot ETF products in the U.S. witnessed outflows rising to $159 million from $87 million a day earlier. Fidelity Ethereum Fund (FETH) topped with outflows of $148 million.
4th ranked XRP (XRP) declined 2.7 percent overnight. The cryptocurrency is currently trading at $2.26, around 41 percent below the all-time high recorded in January 2018.
5th ranked BNB (BNB) recorded an overnight decline of 0.5 percent. At its current trading price of $691.79, BNB is trading 13 percent below the all-time high recorded on December 4, 2024.
6th ranked Solana (SOL) dropped 4.8 percent overnight, dragging weekly losses to 10.8 percent. SOL is currently trading at $187.50, around 29 percent below its record high touched in November 2024.
7th ranked Dogecoin (DOGE) tumbled 6.9 percent overnight and more than 6 percent in the past week to trade at $0.3238. DOGE is trading 56 percent below the all-time high touched in May 2021.
9th ranked Cardano (ADA) lost 7.5 percent overnight to trade at $0.8978. ADA is currently trading 71 percent below the record high touched in September 2021.
10th ranked TRON (TRX) also declined 2.9 percent overnight to trade at $0.2429. TROX has slipped 7.8 percent in the past week. The trading price is 45 percent below the cryptocurrency's all-time high touched on December 4, 2024.
92nd ranked Neo (NEO) topped overnight gains with a surge of 3.8 percent.
69th ranked ai16z (AI16Z), an AI Meme cryptocurrency topped overnight losses with a decline of more than 27 percent.
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