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Cryptocurrencies and Stock Markets Record Rapid Declines

Yesterday, the Federal Reserve (Fed) released data from its April meeting, a meeting that took place before the US employment decline, hiring constraints, and the unexpected rebound in consumer prices. Nevertheless, the Fed sees the economy as gradually recovering, and given the pace of inflation, they hinted at the possibility of reducing stimulus. As a result, markets and bitcoin plummeted.

The Fed’s data reduced investors’ appetite for risk, leading to declines in the main stock market indices. The S&P 500 fell 0.3% to 4115.68, recording a fall of 12.5 points. The Dow Jones fell 587 points, and the Nasdaq Composite closed at 13299.74 with losses of only 0.1%.

The possibility of the Fed, slowly withdrawing economic stimulus from the market, also caused 10-year Treasury yields to settle at 1.680% compared to 1.641% the previous day. The stimulus currently injected by the Fed is around $120 billion per month.

Oil prices also fell, reaching $63.36 per barrel, probably due to a possible deal between Iran and the US. The Energy Information Administration’ (EIA) crude stock change indicator released yesterday, showed that crude inventories rose.

Undoubtedly, the biggest fall in the stock markets yesterday happened in cryptocurrencies. Elon Musk’s statements about Tesla possibly selling its Bitcoin and restrictions by the People’s Bank of China, which considers a ban on cryptocurrency transactions, sent cryptocurrencies tumbling fast.

Bitcoin plummeted as low as $30,201.96 yesterday, registering a 41% drop so far this year. The massive sell-off in cryptocurrencies, witnessed yesterday on the markets, led to the collapse of these assets by $470 billion, according to the cryptocurrency exchange CoinMarketCap.

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