Why Bitcoin, Ethereum, and Dogecoin Are Falling Today
Cryptocurrencies took a breather this morning after a nice rally in recent days, as investors digest more macro news and as the electric car maker Tesla (NASDAQ: TSLA) announced that it had sold much of its Bitcoin (CRYPTO: BTC) holdings.
Over the past 24 hours as of 9:45 a.m. ET, the price of Bitcoin had fallen more than 5%, the price of Ethereum (CRYPTO: ETH) had fallen more than 6%, and the price of the meme token Dogecoin (CRYPTO: DOGE) was down nearly 7%.
The European Central Bank (ECB) caught the market off guard this morning by announcing that it would hike its key benchmark interest rate by 50 basis points (0.5%). The ECB has kept rates negative since 2014, so the move is a big deal, but investors didn't think the ECB would start with a half point. Riskier assets including cryptocurrencies have not fared well amid the rising interest rate environment this year, as rising interest rates make safer assets yield more, which then essentially demands more of riskier assets typically trading at larger valuations.
Source Fool.com
