Technology stocks among other growth assets tend to be hit when rates rise. This is because future earnings turn into a less attractive medium to investors when yields are higher.
“Overall, I think the global markets have shown weakness in light of the recent Fed moves to raise interest rates. Hence, I do think the drop yesterday is quite correlated. We’ve seen U.S. markets fall yesterday and as a result, all other risk asset classes fared equally poorly including crypto,” said Vijay Ayyar, vice president of corporate development and international at cryptocurrency exchange Luno.
“Specifically with regard to Bitcoin and crypto, the last 4 weeks have seen some weak price action owing to a lack of interest/demand, holiday season and potentially similar factors.”
Shares in Europe and Asia-Pacific also dropped on Thursday.
Yuya Hasegawa, crypto market analyst at Japanese bitcoin exchange Bitbank, said bitcoin could tumble further, potentially dropping to $40,000, if upcoming December nonfarm payrolls data shows strong job growth.
