Bitcoin slides after Powell’s Jackson Hole speech, crypto market cap back to under $1T

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Bitcoin (BTC-USD), ethereum (ETH-USD) and other major cryptocurrencies sold off in Friday afternoon trading in a broad risk-off day after Federal Reserve Jerome Powell’s hawkish keynote earlier at Jackson Hole.

Bitcoin (BTC-USD) dipped 4.3% to $20.60K, the lowest level since mid-July, at 2:35 p.m. ET, and ether (ETH-USD) fell 9.2% to $1.54K. Shiba inu (SHIB-USD) -7.3%, ether classic (ETC-USD) -7.2%, uniswap (UNI-USD) -9.8% and avalanche (AVAX-USD) -6.1% were some of the biggest losers among the top 20 largest cryptos by market cap.

Overall, the global crypto market cap cracked below $1T, standing at $996.1B at the time of writing, according to CoinMarketCap data. The slump in digital tokens came as equities also took a beating, with the Dow Jones (DJI) -2.2%, S&P 500 (SP500) -2.6% and Nasdaq (COMP.IND) -3.2%, highlighting investors’ narrowed tolerance in risk assets as the Fed pledges to keep hiking interest rates until inflation comes down in a meaningful way.

“Though not as convincingly as a month ago, positioning in BTC and ETH remains long, offering some indication that the market believes that the two are somewhat oversold,” Andreas Steno Larsen, director and head of research at Heimstaden, wrote in a Twitter post.

Larsen, who remains long bitcoin (BTC-USD) and ether (ETH-USD), added that positioning in ETH is more long than in BTC positioning, as the former easily outpaced the latter in the past month ahead of its highly-anticipated transition to Proof-of-Stake from Proof-of-Work, as seen in this chart.

Crypto-related stocks gapped down broadly intraday: Riot Blockchain (RIOT) -8%, Marathon Digital (MARA) -11.7%, HIVE Blockchain (HIVE) -9.8%, Bit Digital (BTBT) -10.3%, MicroStrategy (MSTR) -8.1% and Coinbase Global (COIN) -6.4%.

Elsewhere in the cryptosphere, VGX tokens extend rally in wake of sales process for Voyager Digital’s assets. Meanwhile, for more on the possible longer-term ramification of Powell’s comments, see why Mott Capital says the speech could deliver a “fatal blow” to markets.