© Reuters
By Ambar Warrick
Investing.com– Prices plunged to a two-month low on Monday as losses after blockchain’s switch to proof-of-stake continued as the broader crypto market weakened ahead of a meeting from the Federal Reserve this week.
The world’s second-largest cryptocurrency fell 10% to $1,303 – its lowest level since mid-July. The token has now lost nearly a quarter of its value since the move to proof-of-stake (PoS), dubbed the “merger,” went into effect last week.
While this move has significantly reduced Ethereum’s energy consumption, it has also been criticized for making the blockchain less decentralized, as well as setting the high buy-in amount for earning Ethereum at 32 Ethereum. staking rewards.
Ethereum’s recent losses have now negated any gains made in the run-up to the merger, as the token has significantly underperformed the broader crypto market.
by comparison, is down just over 6% in the past week.
But concerns over rising US interest rates weighed on the cryptocurrency market further on Monday. The , the world’s largest token, fell 6% to $18,811, while the total cryptocurrency market capitalization fell to $910 billion, according to data from CoinMarketCap.
Most risk assets plunged for the day ahead of a widely expected Fed hike on Wednesday. Operators are also considering the possibility of a 100 basis point hike.
The move will take US rates to their highest level since the 2008 financial crisis, which should weigh heavily on speculative assets such as stocks and crypto.
Crypto has been particularly hard hit by rising interest rates this year, given that much of the asset class’ stellar rally over the past two weeks has been spurred by ultra-free monetary policy. Total market capitalization is down more than $2 trillion from highs reached last week, and no respite is in sight.