Cryptocurrencies dragged down by Ether as it hits two-month low

The second-largest digital token's weekend slide continues as Bitcoin drops below $19,000

The price of Ether has dropped rapidly since last week's upgrade of the Ethereum blockchain. Reuters

Cryptocurrencies extended their weekend slide on Monday, hampered by a further drop in the second-largest token, Ether, as well as the prospect of a global wave of monetary tightening.

Ether fell as much as 10.04 per cent to a two-month low and was trading at $1,308.36 at 9.20am UAE time on Monday, while Bitcoin receded 6.06 per cent to $18,822.29. Tokens such as XRP, Avalanche and Polkadot posted heavier losses.

An Ether jump since mid-June that was spurred by hype around an upgrade of the Ethereum blockchain is rapidly unwinding now that the revamp is done.

Meanwhile, investors are bracing for volatility from the jumbo interest-rate hike expected this week from the US Federal Reserve to fight price pressures.

The Ethereum update — known as the Merge — to slash energy usage is a “ginormous shift” but “in this inflationary environment macro trumps everything”, Antoni Trenchev, managing partner at cryptocurrency lender Nexo, wrote in a note.

That is evident in the pressure on a range of assets: global stocks are closer to wiping out a climb since mid-June that for many was a bear-market rally. US equity futures were in the red on Monday, while a dollar gauge pushed higher.

Elsewhere, reports that Ripple Labs and the US Securities and Exchange Commission are seeking an immediate ruling in a court case over Ripple’s affiliated token XRP saw the latter shed as much as 12 per cent. The SEC argues Ripple was “reckless” in its claims that XRP is not a regulated security.