Fears that interest rates in the U.S. might be headed higher than expected have pushed the price of Bitcoin (BTC) to a three-week low of $22,000 U.S.
U.S. Federal Reserve Chairman Jerome Powell's hawkish testimony before Congress has raised expectations of higher interest rates this year, with bond traders now betting on a 50-basis point rate hike later in March.
Those expectations for higher interest rates pushed the price of Bitcoin, the biggest cryptocurrency by market capitalization, as low as $21,870 U.S. in overnight trading.
Ethereum (ETH), the second largest cryptocurrency, fell to a multi-week low of $1,535 U.S.
Powell said before Congress that the central bank is likely to raise rates more than expected, warning that the process of pushing inflation down to its 2% target has a “long way to go.”
Since early 2022, the Fed has raised interest rates in the U.S. by 450 basis points, upending stock markets in the process.
While cryptocurrencies have proven to be resilient and outperformed equities so far this year, they are not immune to worries over higher interest rates.
Bond traders now expect the Fed’s key interest rates to peak at 5.65% this summer.
Despite its current retreat, the price of Bitcoin remains up 32% year-to-date, outperforming nearly every other asset class.
