Crypto investors have no doubt spent much of this week fondly reminiscing about the good old days, ie. most of the year 2024, when their properties rose in price more often than usual. That’s because we’ve seen the coin and token market shrink over the past few days, with even some of the biggest names in the space booking double-digit losses.
According to the data he collected S&P Global Market Intelligence, Chain link (CRYPT: LINK)one of the more popular high-profile utility tokens, lost almost 16% of its value during the week. Uniswap (CRYPTO: UNI) fared a little better, recording a drop of “only” 15%, while Bitcoin Cash (CRYPTO: BCH) investors could eventually take solace in a relatively shallow 10% decline. Aave (CRYPTO: AAVE)meanwhile, it has fallen by more than 19%.
At both ends of the week, several macroeconomic news and events combined to make investors less enthusiastic about cryptocurrencies.
He was the first latest employment data from the Bureau of Labor Statistics (BLS). This is the most influential set of jobs data for many investors, indicating that the number of jobs created in this country rose to 8.1 million in November. The October figure was 7.8 million. More job creation suggests that businesses are generally thriving, which is more likely to boost the economy even more.
It is more likely that it will not only discourage Federal Reserve (Fed) from a further cut in key interest rates, but actually an increase in rate risk hiking. Cryptoheads don’t like high rates, because they make “safe” assets like government bonds more attractive and stifle enthusiasm for risky things (ie most, if not all, cryptocurrencies).
As if to confirm this discouraging news, on Thursday Michelle Bowman, a member of the Fed’s board of governors, described the latest rate cut in December as the latest step in the regulator’s current monetary policy.
Additionally, she said, the Fed would be wise to “refrain from prejudging the future policies of the incoming administration.”
“Instead, we should wait for more clarity and then try to understand the effects on economic activity, the labor market and inflation,” Bowman added, words that were not comforting to many fans of rate cuts across the cryptoverse.
Digital coins and tokens are relatively volatile assets, so it’s no surprise that many have slid at double-digit rates due to these events. So now the market is basically predicting the likelihood that there will be no rate cut, at least for the foreseeable future. The good thing about this for crypto lovers is that many cryptocurrencies make a nice, healthy bounce when more positive news (or statements from Fed officials) hit the headlines.
