Why Bitcoin, Ethereum, and Cardano Are Falling At the moment – The Motley Idiot

What happened

Most cryptocurrencies fell Wednesday, as investors start to turn their attention to the Federal Reserve’s upcoming meeting later this month and try and figure out what the Fed will do.

Over the last 24 hours, the price of the world’s largest cryptocurrency, Bitcoin (BTC -4.92%), traded roughly 4.5% lower as of 10:35 am ET today. The price of the world’s second-largest cryptocurrency, Ethereum (ETH -7.77%)traded roughly 6.8% lower, and the price of Cardano (ADA -6.42%) traded 5.5% lower.

So what

Markets are coming off an August jobs report last week that still suggests the labor market is strong. The US added 315,000 jobs in August, which beat estimates. The US unemployment rate also ticked higher in August and now sits at 3.7%, which is still a very healthy number.

Image source: Getty Images.

The job market is weird in the sense that while economists want to see a healthy labor market, the Fed almost needs to see some deterioration to stop hiking interest rates. This makes riskier assets like cryptocurrencies less appealing to invest in.

The longer and more aggressively the Fed raises rates, the worse it will likely be for the likes of Bitcoin and Ethereum. The Fed is expected to raise its benchmark overnight lending rate by 0.50% or 0.75% at its September meeting and I don’t think the recent jobs report has ruled either option out yet. The upcoming reading of the consumer price index (CPI) next week will likely play a big role in the Fed’s decision.

In other news, Ethereum next week is expected to complete its long-awaited “merge” in which the network will cease operating on a proof-of-work (PoW) mechanism and begin operating on a proof-of-stake (PoS) mechanism .

PoW is when crypto miners use lots of computing power to solve a cryptographic puzzle as fast as possible, which then allows them to validate transactions, form new blocks, and mine tokens. In PoS, miners stake their existing tokens and get entered into what is essentially a lottery system to get the opportunity to validate transactions and earn tokens. PoS is a lot more energy efficient than PoW.

Ethereum had been rising in anticipation of the “merge” yesterday, although the price today appears to be following the rest of the crypto market.

Today’s action seems related to much of the same fearful sentiment the market has had all year. If the Fed continues to look hawkish, crypto tends to struggle, similarly to most stocks.

But the job market news wasn’t all bad. It was more in line with estimates than July numbers and the small rise in unemployment could actually suggest the Fed is making progress in its bid to bring down inflation — the tricky part is if unemployment rises too high.

I also think Ethereum’s “merge” is going to be a real positive for the network, making it more energy efficient. Other upgrades down the line should also ease congestion on the network and lower transaction fees. Although they could go longer in the near term, I’m bullish on Bitcoin, Ethereum, and Cardano long term.

Bram Berkowitz has positions in Bitcoin and Ethereum. The Motley Fool has positions in and recommends Bitcoin and Ethereum. The Motley Fool has a disclosure policy.


Share post on

Sonic BTC is reader-supported. When you buy through links on our site, we may earn an affiliate commission.

Cardano (ADA) is listed by the Swiss Crypto Asset Administration Service – U.At this time Cardano

Cardano (ADA) is listed by the Swiss Crypto Asset Administration Service – U.At this time

Alex Dovbnya A Swiss crypto wealth management app has added support for the Cardano...

By Roger Gofman
Is SundaeSwap Exacerbating Cardano’s DeFi Issues?  – Guardian Guru Cardano

Is SundaeSwap Exacerbating Cardano’s DeFi Issues? – Guardian Guru

SundaeSwap's mainnet was officially launched earlier this year and the crypto community was pretty...

By Roger Gofman
Cardano Founder Assaults Terras Do Kwon: Particulars – U.At the moment Cardano

Cardano Founder Assaults Terras Do Kwon: Particulars – U.At the moment

Cardano founder Charles Hoskinson has attacked Terra co-founder Do Kwon for insisting he is...

By Roger Gofman
Wafini NFT Market on Cardano Prepared for Seed Gross sales + Ongoing Whitelist for Seed Gross sales – Cryptonews Cardano

Wafini NFT Market on Cardano Prepared for Seed Gross sales + Ongoing Whitelist for Seed Gross sales – Cryptonews

Disclaimer: The following text is a press release and does not form part of...

By Roger Gofman
Cardano Founder Shares Replace on Ethiopia Initiative – The Coin Republic Cardano

Cardano Founder Shares Replace on Ethiopia Initiative – The Coin Republic

ADA price at the time of writing - $0.4461Nearly 24 public schools were selected...

By Roger Gofman
Cardano Data eighth Consecutive Week of Optimistic Fund Circulate: Particulars – U.At present Cardano

Cardano Data eighth Consecutive Week of Optimistic Fund Circulate: Particulars – U.At present

Gamza Khanzadaev Cardano ends the week with fund inflows for the eighth straight day,...

By Roger Gofman
Cardano Crypto Worth Prediction – ADA Offers Up Good points However Vasil Can Push Return To $0.52 – Cryptonews Cardano

Cardano Crypto Worth Prediction – ADA Offers Up Good points However Vasil Can Push Return To $0.52 – Cryptonews

Much like the Ethereum merge, Cardano Vasil's successful hard fork upgrade has yet to...

By Roger Gofman
Charles Hoskinson Says Bitcoin Ought to Undertake Cardano’s Ofelimous Protocol to Survive – U.Right this moment Cardano

Charles Hoskinson Says Bitcoin Ought to Undertake Cardano’s Ofelimous Protocol to Survive – U.Right this moment

Yuri Molkhan The IOG founder recommends that Bitcoin adopts the Ofelimous protocol developed by...

By Roger Gofman

Latest Posts

Dot sample [DOT] could possibly be on a brief bullish dash thanks to those developments – AMBCrypto Information Polkadot

Dot sample [DOT] could possibly be on a brief bullish dash thanks to those developments – AMBCrypto Information

Dot pattern [DOT] and Cardano [ADA] Blockchains are known for their intense developer activity...

By Roger Gofman
Stellar

Prime DeFi Funding Rounds in LatAm – 2022 – LatamList

Interest in crypto and DeFi has exploded in Latin America over the past year....

By Roger Gofman
CryptoSlate Wrapped Day by day: Binance Targets Cyber ​​Monetary Crimes;  CEL tanks after Alex Mashinsky resigns from Celsius – CryptoSlate Binance

CryptoSlate Wrapped Day by day: Binance Targets Cyber ​​Monetary Crimes; CEL tanks after Alex Mashinsky resigns from Celsius – CryptoSlate

Some of the biggest news in the cryptosphere for September 27 include Binance's new...

By Roger Gofman
Ethereum

ÐΞVcon-0 Recap

Day 1 - Monday 24th Nov - ÐΞV: Mission and Processes The first day...

By Roger Gofman
ITS HAPPENING AGAIN (Historical past Repeating)!! Ethereum Worth Prediction, Bitcoin Information In the present day (BTC & ETH) Videos

ITS HAPPENING AGAIN (Historical past Repeating)!! Ethereum Worth Prediction, Bitcoin Information In the present day (BTC & ETH)

ITS HAPPENING AGAIN (History Repeating)!! Ethereum Price Prediction, Bitcoin News Today (BTC & ETH)...

By Roger Gofman
Rocketize Token, Child DogeCoin and Shiba Predator: These meme cash will show you how to keep away from the unfavorable results of the bear market – NewsWatch Dogecoin

Rocketize Token, Child DogeCoin and Shiba Predator: These meme cash will show you how to keep away from the unfavorable results of the bear market – NewsWatch

It is possible to see an upward trend in transaction volume with the new...

By Roger Gofman
Cardano (ADA) is listed by the Swiss Crypto Asset Administration Service – U.At this time Cardano

Cardano (ADA) is listed by the Swiss Crypto Asset Administration Service – U.At this time

Alex Dovbnya A Swiss crypto wealth management app has added support for the Cardano...

By Roger Gofman
Astar Community’s Web3 Advert Showcases 329 Prime Manufacturers in Japan – FinanceFeeds Polkadot

Astar Community’s Web3 Advert Showcases 329 Prime Manufacturers in Japan – FinanceFeeds

Blockchain innovation hub Astar Network is making strides in driving Web3 adoption around the...

By Roger Gofman