and other cryptocurrencies tumbled Friday, giving up gains from a rally this week as digital assets came under pressure from macroeconomic factors similarly shaking the stock market.
Bitcoin was down more than 4% over the past 24 hours but holding above $40,000. The retreat marks a fall after a recent surge: Prices for the leading crypto fell below $39,000 at points on Monday before climbing as high as near $43,000 on Thursday.
Comments from Federal Reserve Chair Jerome Powell then rocked the boat.
Bitcoin and its peers should in theory trade independently of mainstream financial markets, but they have proven to be correlated with other risk-sensitive assets, especially tech stocks. And stocks fell on Thursday after Powell signaled that the Fed was likely to raise interest rates by a sizable half-point at its next meeting in May.
Tighter monetary policy and higher interest rates will increase the cost of borrowing and is likely to dampen investor sentiment on assets that are viewed as riskier.
“Bitcoin was rejected at $43,000 on Thursday as the U.S. stock market slid on the Fed Chair’s hawkish comment,” said Yuya Hasegawa, an analyst at crypto exchange Bitbank.
Bitcoin’s smaller peer,
also fell, sliding more than 4% and hovering around $3,000. The token underpinning the Ethereum blockchain network topped $3,150 on Thursday in a rally that carried it from below $2,900 in the depths of Monday trading.
“Altcoins,” or smaller cryptocurrencies, were similarly feeling the pain.