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Major Cryptocurrencies Bitcoin and Ether Plunge 10% and 12% in value

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LAHORE MIRROR (Monitoring Desk)– Bitcoin prices fell sharply on Friday, while ether prices also dived, wiping off nearly $150 billion from the crypto market.

Bitcoin fell about 10% and was trading near $38,425 late Friday morning, according to Coin Metrics. Ether, the second-largest cryptocurrency by market cap, dived more than 12% to $2,807.

The declines in cryptocurrencies follow Wall Street losses on Thursday. The Nasdaq was down almost 5% this week through Thursday, and the S&P 500 is into its third straight week of losses.

As the 10-year U.S. Treasury yield spiked earlier this week, rising rates have caused investors to shed their positions in riskier assets. Yields move opposite to prices.

The Federal Reserve have also indicated it plans to begin reducing its balance sheet, as well as tapering of bonds and raising interest rates.

A common investment case for bitcoin is that it serves as a hedge against rising inflation as a result of government stimulus, but analysts are saying the risk is that a more hawkish Federal Reserve may take the wind out of bitcoin’s sails.

As yields pulled back later in the week, however, foreign exchange trading firm Oanda’s Senior Market Analyst Edward Moya said it was “a little disappointing to not see bitcoin react more positively to the reversal in Treasury yields.”

Bitcoin prices have fallen sharply since November, tumbling more than 40% from a record high of about $69,000.

Some experts warn that the crypto market could be heading toward a downturn soon, as heightened regulatory scrutiny and intense price fluctuations dampened bitcoin’s prospects.

SOURCE: CNBC