Investing.com – Prices tumbled to a two-month low on Monday as post-blockchain Proof-of-Stake losses continued as the broader crypto market weakened ahead of this week’s Federal Reserve meeting.
The world’s second-largest cryptocurrency fell 10% to $1,303, its lowest level since mid-July. The token has lost almost a quarter of its value since the transition to Proof-of-Stake (PoS), dubbed the “merger,” went into effect last week.
While the move significantly reduced Ethereum’s energy consumption, it was also criticized for making the blockchain less decentralized and for setting a high buy-in amount for Ethereum earnings at 32 Ethereum.
Ethereum’s recent losses have now wiped out any gains made leading up to the merger, as the token has significantly underperformed the broader crypto market.
for comparison, over the past week has decreased by just over 6%.
But concerns about rising US interest rates further affected the cryptocurrency market on Monday. The world’s largest token fell 6% to $18,811, while the total cryptocurrency market capitalization fell to $910 billion, according to CoinMarketCap.
Most risky assets fell on the day ahead of the widely anticipated Fed rate hike on Wednesday. Operators are also considering a 100 bps increase.
The move would raise U.S. rates to their highest levels since the 2008 financial crisis, which should have a big impact on speculative assets such as stocks and cryptocurrencies.
Cryptocurrency has been particularly hard hit by rising interest rates this year, given that much of the asset class’s stellar rally over the past two weeks has been fueled by ultra-loose monetary policy. The total market cap is down more than $2 trillion from last week’s highs, and no respite is in sight.