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Cryptocurrencies are bleeding amid fears of a larger rate hike

Cryptocurrencies

London, (Business News Report)|| Cryptocurrencies fell sharply, on Tuesday morning, amid fears of a larger interest rate hike from central banks around the world.

Bitcoin fell 5.3% to $39,831.99, down about $2,240 from its previous close.

The most famous digital currency, fell by 17.3% from its highest level this year of $48,234, which it recorded on March 28.

Ether, the second largest digital currency, fell 6.6% to $2,991.51, down $210.86 from its previous closing level.

The decline in cryptocurrencies came amid fears of monetary tightening in the United States, and the move by the US Federal Reserve to raise interest rates.

Virtual currencies do not have a serial number and are not under the control of governments and central banks, like traditional currencies, but are dealt with only over the Internet, without a physical presence of them.

A Reuters poll showed that the Federal Reserve (the US central bank) may raise interest rates by 50 basis points in the May and June meetings, or a total of 100 points, according to what 56 economists out of 102 surveyed by the agency said.

Earlier, the Federal Deposit Insurance Corporation issued a letter asking the agency-supervised institutions to notify the appropriate regional director of their activities with crypto-related assets or their intentions to engage in crypto-related activities.

Russia is considering accepting bitcoin as a way to pay for its oil and gas exports, according to a senior deputy in the Russian parliament (Duma).

Pavel Zavalny said that “friendly” countries would be allowed to pay in cryptocurrency or their local currencies.

Russian President Vladimir Putin had said earlier that he wanted “unfriendly” countries to buy Russian gas in rubles.

Meanwhile, he understood that this step was aimed at strengthening the Russian currency, which has lost more than 20% of its value this year.

The European Union is currently working to urgently enact laws regulating the work of digital currencies, in an attempt by Europeans to prevent Russia from using them to circumvent sanctions.

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