[Bitcoin Now] Decline Amid Fed Tightening Concerns... Investor Sentiment Also 'Contracting'

[Asia Economy Reporter Lee Jung-yoon] Concerns over the U.S. Federal Reserve's (Fed) tightening policy continue, causing the price of the representative virtual asset Bitcoin to decline.

According to the global virtual asset market tracking site CoinMarketCap, as of 10:21 a.m. on the 16th, the price of Bitcoin was recorded at $17,412 (approximately 22.82 million KRW), down 2.30% from the previous day.

The Fed implemented a big step (a 0.50 percentage point increase in the benchmark interest rate) on the 14th (local time). Although the rate hike was smaller than before, it stated that further measures are necessary to curb inflation. Fed Chair Jerome Powell said that they will not consider lowering interest rates until there is clear evidence that inflation is definitely decreasing, adding, "There is still a long way to go." Major central banks such as the European Central Bank (ECB) and the Bank of England (BOE) also continued their tightening moves by raising benchmark interest rates by 0.50 percentage points.

The U.S. stock market, which shows a synchronized trend, also fell sharply. On the 15th (local time), the Nasdaq index, centered on technology stocks, closed at 10,810.53, down 3.23%. The Dow Jones Industrial Average fell 2.25% (764.13 points) to 33,202.22, and the large-cap S&P 500 index closed down 2.49% at 3,895.75.

In addition, fears of an economic recession are emerging. The U.S. Department of Commerce announced that retail sales decreased by 0.6% compared to the previous month, marking the largest decline in 11 months since December last year (-2.0%). U.S. industrial production in November fell 0.2% month-on-month, with manufacturing production also decreasing by 0.6% in November, marking a decline for the first time in five months.

The virtual asset specialized media CoinDesk reported that Bitcoin's price showed a pattern similar to the U.S. stock market, stating, "It turned downward this week as the Federal Open Market Committee (FOMC) was reconsidered."

Meanwhile, according to the virtual asset data provider Alternative, the Fear & Greed Index, which indicates investor sentiment as an index, dropped 2 points from the previous day to 29 points (fear). Alternative's Fear & Greed Index means that the closer the score is to 0, the more extreme pessimism investors feel, and the closer it is to 100, the more optimistic they are.