For a second there it seemed like everything was going to be alright.
With many investors concerned about a surprise 0.75% hike in policy interest rates by the Federal Open Market Committee (FOMC), the market breathed a sigh of relief when the Fed announced a 50 basis point increase in a policy statement on May 4.
While the global market cap of crypto assets jumped 5.6% by $100B dollars from $1.8T to $1.9T on May 4, those gains have been erased the following day.
Global crypto market cap stands at $1.77T, according to CoinGecko as of 2 p.m. New York time.
BTC is down 5.6% in the last 24 hours. ETH is down 3.6%. And every other smart contract platform in the top ten by market cap has fallen at least 4%.
Hype Coins Rekt
Down 13.2%, ApeCoin, the token of Yuga Labs’ ecosystem which had been red hot leading up to the associated Otherdeeds sale, is the second-worst performer in the last 24 hours. STEPN, of the recent “Move2Earn” phenomena, has bled the most among the top 100 coins, shedding 17.3%.
Angel investor and crypto advisor Tyler Reynolds thinks more sophisticated players were quick to take advantage of the previous day’s upward price action. “The smart money saw yesterday’s pump for the dead cat bounce that it was and have moved quickly to sell off illiquid positions while the liquidity to exit is there,” Reynolds told The Defiant.
“Reversing from yesterday’s euphoria, people seem to better understand that while a 75bps hike is off the table for next month, the Fed will keep hiking until something breaks,” the angel investor said. “You don’t want to be in this market when that breaking happens.”
The crypto market isn’t the only one doing badly — the Nasdaq is down 3.42% on the day. Crypto and equities have tended to be highly correlated in recent months.