Bitcoin extended its losses on Monday, losing more than $1,000 from the previous day’s high under the cloud of higher interest rate hikes.
The cryptocurrency was trading at $18,809.42 as of Monday morning, down by 6.13% in the last 24 hours and around 16% from the recent peak of more than $22,000 about a week ago.
The cryptocurrency had rallied to more than $20,000 on Sunday. The world’s biggest virtual currency, which has a market cap of more than $360.6 billion, has lost 61% in value compared to a year ago, when it was trading above $48,000.
Other digital currencies, such as Ethereum, BNB and XRP, also fell by 10.25%, 5.63% and 5.68%, respectively, according to CoinMarketCap. The US Federal Reserve will meet on September 20 and is expected to raise the interest rate by 0.75 percentage points.
Interest rates have already been raised four times this year. Cryptocurrencies, as well as the stock markets, had previously benefited from low interest rates.
“Assets that have benefitted most from ultra-low interest rates – think high-octane growth stocks with earnings well off into the future and non-cash-flow-generating assets like cryptocurrencies – have been hit hardest as markets adjust to the reality of higher interest rates,” said Greg McBride, CFA, Bankrate Chief Financial Analyst.