Ethereum prices fell to a record low of two months Monday as the losses from the shift of the blockchain to proof-of stake continued, as the overall cryptocurrency market was weakened ahead an Federal Reserve meeting this week.
The world’s second largest cryptocurrency fell 10 percent to $1303, its lowest level since the middle of July. The cryptocurrency has dropped nearly a quarter their value in the time since switch towards proof-of-stake (PoS) known as the “merge,” was launched last week.
Although the change drastically reduced the power consumption of Ethereum however, it was also criticised as making the blockchain less centralized, and also for the setting of a high buy-in price for staking reward rewards with a maximum of 32 Ethereum.
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The recent losses of Ethereum have erased all gains made in the months leading up to the merger, with the it largely falling behind the overall market for crypto.
Bitcoin is, by contrast, has dropped a just a little more than 6 percent in the last week.
However, concerns about rising U.S. interest rates weighed more heavily on the cryptocurrency market Monday. Bitcoin the world’s biggest currency, fell by 6percent to $18,811, while the total cryptocurrency market capitalization dropped to $910 billion according to the data of CoinMarketCap.
Most risk-driven assets plummeted in the course of the day, ahead of an widely-anticipated 75 basis-point bps hike from the Fed on Wednesday. The market is also anticipating in an eventual 100 basis point increase.
The move is expected to bring U.S. rates to their highest levels since 2008’s financial crisis, and is likely to have a major impact on the speculative asset market, such as crypto and stocks.
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Crypto was particularly impacted by the rising rate of interest this year considering that a large portion of the asset’s impressive rise in the last two weeks was fueled by the monetary policy that is extremely loose. The total markets capitalization has fallen by more than $2 trillion from record-highs reached last week, with no relief in the near future.