Home Markets US Stocks Lose $1.25 Billion in One Day, More Than Total Crypto Market Cap

US Stocks Lose $1.25 Billion in One Day, More Than Total Crypto Market Cap

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US Stocks Lose $1.25 Billion in One Day, More Than Total Crypto Market Cap

bitcoin (BTC) and altcoins lost big on August 26 after the US Federal Reserve made hawkish remarks on economic policy.

Overall, risk assets took a hit – US stocks lost around $1.25 trillion in a single session.

Analyst: Powell abandons ‘soft landing’ rhetoric

As comments by Fed Chairman Jerome Powell suggested that bigger rate hikes were still firmly on the table despite recent data suggesting inflation was already slowing as investors rushed to reduce risk.

“Restoring price stability is likely to require tight policy to continue for some time. Historical data provides strong warning against premature policy easing,” Powell said at the annual Jackson Hole Economics Symposium.

The S&P 500 closed down 3.4% on the day, hitting its lowest levels since late July. The Nasdaq Composite Index copied the move and extended losses, shedding 4%.

Overall, the US stock market has lost more value than the entire market capitalization of Bitcoin and altcoins combined.

According to data from Cointelegraph Markets Pro and TradingView.

1-day candle chart of the total crypto market capitalization. Source: Trading View

While some argued that Powell’s words weren’t the critical area to consider in terms of future Fed policy, others noted that previous narratives were slowly being let go when it comes to the Fed’s outlook. ‘inflation.

Holger Zschaepitz, a popular markets commentator for German media publication Die Welt, felt the speech hit “all the hawkish notes”, with Powell “skipping the dovish notes”.

“The hawkish features were his acknowledgment of the pain that’s probably needed to reduce inflation – more of a soft landing, the indication that rates will have to be lifted above neutral,” he said. added in part of the Twitter comments.

Powell also said the decision on the extent of the key interest rate extension in September would “depend on the totality of incoming data and the changing outlook.”

The latest readings from CME Group FedWatch Tool at the same time, a majority consensus emerged in favor of a 75 basis point hike in September, echoing the July decision.

Fed Target Rate Probability Chart. Source: CME Group

No hodler can hide the pain

For crypto investors, however, the immediate impact of the risk asset rout was impossible to avoid.

Related: Price Analysis 8/26: BTC, ETH, BNB, XRP, ADA, SOL, DOGE, DOT, SHIB, MATIC

BTC/USD lost as much as 8.8% at one point, dipping below $20,000 for the first time since July 14 before recovering to linger just above the significant line in the sand.

BTC/USD 1 hour candle chart (Bitstamp). Source: Trading View

For altcoins, the picture was no less dire. Ether (ETH), the largest altcoin by market capitalization, recorded intraday losses approaching 14%.

ETH/USD was hovering around $1,500 at the time of writing on August 27, wiping out an entire month’s gains. Among the price holds was a new warning from popular Crypto trader Ed, who was considering a possible further step down.

“Could fall to $1200-1300 before any significant rebound,” part of his last Twitter update read.

ETH/USD 1-day candle chart (Binance). Source: Trading View

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