Bitcoin, Ether, top 10 crypto in red, Fed warning of more rate hikes

Federal Reserve chair Jerome Powell | Image: Envato Elements, Getty Images

Bitcoin fell in Thursday morning trading in Asia, dropping below support at US$25,000 at one stage. Ether also fell, along with other top 10 non-stablecoin cryptocurrencies by market capitalization as trading volumes dipped and the U.S. Fed left interest rates unchanged as expected, but warned of more hikes this year to tackle inflation. Ripple’s XRP token fell despite the release of documents this week that were expected to help the company’s defense in an SEC lawsuit.

Crypto in red

Bitcoin fell 2.94% over the last 24 hours to US$25,062.60 at 6:30 a.m. in Hong Kong, losing 4.69% in the last week, according to CoinMarketCap data. The world’s largest cryptocurrency, with a market capitalization of about US$490 billion, dipped below the US$25,000 support line to as low as US$24,902 earlier in the morning. 

Ether fell 4.74% to US$1,652.25, posting a 9.70% loss for the week. All other top 10 non-stablecoin cryptocurrencies fell, according to CoinMarketCap. 

Cardano dropped 4.10% to US$0.2624, losing 18.57% of its value in the past seven days. Solana fell 3.18% to US$14.44 and posted a weekly loss of 22.52%. 

The two tokens have been on a downtrend since being named in the SEC’s lawsuit filed last week against the Binance.US and Coinbase exchanges, where the federal agency categorized the two — along with dozens of other altcoins — as financial securities.

The U.S. Federal Reserve left interest rates unchanged as expected on Wednesday at 5% to 5.25% after ten consecutive hikes to curb inflation.

But in another negative for investors, Fed chair Jerome Powell said it may take years to get inflation under control, dousing expectations for rate cuts later this year and raising the likelihood of higher interest rates ahead. Stocks ended mixed.

Ripple’s XRP token led the losers in the crypto top 10 by market capitalization, falling 7.48% to US$0.4793 on the day for a weekly loss of 7.19%. 

The declines came despite the release of the so-called “Hinman documents,” this week, a collection of previously sealed emails and pages from former U.S. Securities and Exchange Commission director William Hinman. The notes indicate that Ether should not be categorized as a financial security.

Ripple Labs Inc. was sued by the SEC in December 2020 on allegations XRP was sold as an illegal unregistered security. Ripple wanted the Hinman documents made public, arguing they show the SEC itself was sending mixed and confused signals over whether cryptocurrencies were securities and failing to offer clear guidance to the industry, which is part of Ripple’s fair notice defense in the case.

However, XRP’s price hasn’t benefited from the release of the documents. Gabriel Shapiro, a U.S.-based attorney and the general counsel at blockchain firm Delphi Labs, wrote on Twitter Tuesday — “​​Hinman emails are a nothingburger though great for Ether. No idea why Ripple thinks these emails help Ripple’s case.”

Shapiro added that the documents were not the bombshell compared to the “huge hype” given to them.

The total cryptocurrency market cap lost 2.76% to US$1.02 trillion in the last 24 hours, and the daily crypto trading volume fell 5.37% to US$31.89 billion, according to CoinMarketCap data.