Bitcoin’s rout worsened over the weekend, and the flagship cryptocurrency is now worth about half of what it was at its peak just months ago.

Bitcoin was trading at $33,500 on Monday morning, off by more than 21% from a week ago. Ethereum was down 9% to under $2,200, a staggering 32% decline from last week, and Cardano dipped below $1, a 35% drop from a week ago.

At its peak in October, Bitcoin posted an all-time high of $69,000, as some investors saw the cryptocurrency as a hedge against inflation. Recently, however, Bitcoin has been more in tune with traditional stocks, which have been in decline amid anxiety over the Federal Reserve’s plan to hike interest rates and uncertainty about the situation in Ukraine.

On Monday morning, the Dow Jones Industrial Average plunged by 800 points after opening — a decline of more than 2%. The Nasdaq was down more than 3%, nearing bear market territory. The CBOE Volatility Index, often referred to as the fear index, was up more than 31%, its highest level in a year.

Cryptocurrency is considered by most to be a risky type of asset, and investors typically shy away from risky assets when there is market uncertainty like there is now. Expectations for interest rate hikes have grown over the past several weeks, as inflation remains persistently high and sticky.

“Crypto is a high-growth nascent industry that trades as a risk asset,” Martha Reyes, head of research at Bequant, told the Wall Street Journal. “It’s quite dramatic this morning and completely driven by the macro environment, buffeted about by the Fed.”

The Fed indicated up to three rate hikes in 2022 during its last meeting in December, but markets are now pricing in even. Consumer prices grew 7% in the 12 months ending in December, the fastest pace since 1982.

Investors will be watching this week’s Federal Open Market Committee meeting very closely. It is the first meeting of Fed officials of the new year, and the committee might announce when they will begin liftoff. The consensus estimate is that the first hike will happen in March.

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