After St. Louis Federal Reserve President James Bullard signals that interest rates may rise by the end of the year, the price of BTC (bitcoin) falls further and stocks fall.

Following the Federal Reserve’s surprising hawkish stance, BTC (bitcoin) funds have been losing money. The Federal Reserve startled markets on Wednesday by taking a hawkish stance, pushing up the date of its next interest rate hike to 2023. Since then, most virtual assets, including BTC (bitcoin), have been under pressure. But the leading cryptocurrency has remained relatively resilient in comparison to most fiat currencies and gold.

BTC (bitcoin) and the broader financial markets experience a new wave of sell-offs in response to comments from James Bullard, president of the United States Federal Reserve Bank of St. Louis, indicating that the first interest rate increase is expected in late 2022. Bullard’s comments were even more hawkish than Fed Chair Jerome Powell’s comments when he indicated that the rate hikes would begin in 2023. Powell’s comments triggered a sell-off in financial markets, while the US dollar strengthened.

The consistent sell-off across a wide range of assets, including stocks, gold, and cryptocurrencies, has eroded the narrative that BTC (bitcoin) is an uncorrelated asset. BTC (bitcoin) correlation with both gold and stocks has increased throughout 2021.

Friday’s close in traditional markets marked one of the Dow’s worst weeks since October, with the index losing three percent in five straight sessions.

Concerning the reason for the Fed’s recent hawkish stance, Bullard pointed to higher-than-expected inflation as the economy reopens following the Covid-19 lockdowns.

Bullard stated:

“We’re anticipating a good year, a good reopening.’’ However, this year has been larger than expected, with higher inflation. I believe it is natural that we have become a little more hawkish in order to contain inflationary pressures.’’

Bullard predicted that inflation would be running at 3 percent this year and 2.5 percent in 2022 before falling back to the Fed’s 2 percent target.

The value of altcoins is falling. Altcoin prices fell alongside BTC (bitcoin) on Friday, as traders sought refuge in stable coins as market volatility increased.

ETH (ethereum) fell more than 13% to $2,137, while Amp (AMP) fell 33% from its all-time high of $0.1211 on June 16.

The total cryptocurrency market cap is now $1.486 trillion, with BTC (bitcoin) dominating at 44.8 percent.