Ethereum’s Merge occurred late last week, changing Ethereum’s network from a proof-of-work validation process to a proof-of-stake validation process. However, in the short period since its launch, Ethereum’s token has dropped significantly, with the token, which was sitting around $1,600 prior to the Merge, all the way down to $1,339.61 (According to CoinMarketCap).
On top of Ethereum’s price, which dropped 8% in the last 24 hours, the total crypto market cap dipped below $1 trillion. This widespread crash affected many other tokens and coins. Bitcoin, which was nearing $23,000 prior to Merge’s launch, is now sitting at $18,984.29 (According to CoinMarketCap) at the time of writing this. Solana is also currently down almost 6% in the past 24 hours, and Cardano is down nearly 7.5%.
The current market crash is being attributed to several macroeconomic factors, such as the recently released consumer price index (CPI) data released on September 13th, indicating that inflation has yet to slow.
Also, later this week, there will be a two-day FOMC meeting. Upon the meetings ending, Federal Reserve Chair Jerome Powell will announce how much the FOMC will raise the federal funds rate. Market experts have predicted that the rate hike could be the biggest in 40 years.
Wednesday’s monetary policy decision is clearly affecting the market significantly, with the broader market losing more than 5% of its value in the last 24 hours. As a result of this, the total cryptocurrency market cap may drop below the $900 billion mark for the first time this month.
Many are anticipating the Federal Reserve to deliver a 75bps hike. This, in tandem with the continued pressure from regulation, has caused the market to remain bearish and resulted in numerous crypto crashes over the past nine months.