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Crypto: Bitcoin dips below $22,000 amid Fed interest rate hikes

Yahoo Finance Live takes a look at cryptocurrency prices ahead of the Fed's next interest rate hike, including Voyager Digital's bankruptcy filings.

Video Transcript

[MUSIC PLAYING]

RACHELLE AKUFFO: News of a possible Fed rate hike weighing on crypto markets this Monday afternoon. The price of Bitcoin, Ether, and other cryptocurrencies dipping today on the expectation that the Federal Reserve will raise interest rates 75 basis points. Valuation of the broader crypto market is down 4.5%, while the top 20 currencies have been trading in the red for the last 24 hours.

Now, in some good crypto news, some relief on the way for customers with assets locked up in Voyager's bankruptcy. Now, part of their funds could be refunded via a new account at sister service, FTX. And that's instead of waiting for Voyager's bankruptcy proceedings to play out. Now, of course, this plan does still have to be approved by a bankruptcy court. But Jared, potentially some relief ahead for a lot of people with their assets locked up in these platforms.

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JARED BLIKRE: Yes. And you got to think there could be more fallout here. Usually, when you have a big explosion like that, I think back to Lehman Brothers. Of course, this is not systemic to the overall asset classes. But this asset class has been shellacked like most others this year.

I want to go to the YFi Interactive in charts and stuff, because I think you mentioned something very interesting. So here we have Bitcoin, it's down 5% over the trailing 24 hours. This is a two-month chart. So basically, Bitcoin has been basing in a very controlled and narrow range for some period of time, just waiting for that next catalyst.

Is it going to be the Fed? Well, I think if the Fed gives the markets anything to be excited about we might get a little lift off. But I don't think we're going to see the huge rallies. And I don't think this-- I think this extends to equities as well. I don't think we're going to see that until Fed-- the Fed has the ammunition in-- the ammunition to pivot. And so that just comes to three months-- two or three months of lower CPI prints. So we'll have to see if that comes.

But traditionally, the market for crypto has been driven by Fed liquidity. Here's the three-year chart. A lot of these spikes have to do with stimulus and QE. Rachelle. And Dave.

RACHELLE AKUFFO: And Jared, a lot of people are wondering, how much worse could this crypto winter get? If they do break through that band that you were just showing there-- for Bitcoin, we've had Ben Armstrong-- otherwise known as Bit Boy on Twitter saying, look, he expects lows of perhaps 13,000 by the end of the year. So you know, Hold On for Dear Life, HODL, as they say in the crypto world, because you're gonna need to have to.