A photo illustration of the digital Cryptocurrency, Litecoin (LTC), Bitcoin (BTC), Ethereum (ETH) and Ripple (XRP) are seen on September 13 2018 in Hong Kong, Hong Kong.
Yu Chun Christopher Wong | S3studio | Getty Images
Bitcoin prices fell sharply on Thursday night, while ether prices also dived.
Bitcoin plummeted by 8% in the last 24 hours, and trading at $38,524 as of 10:56 p.m. ET, according to CoinDesk data.
Ether, the second-largest cryptocurrency by market cap, dived more than 9%. It was trading at $2,828 as of 10:57 p.m. ET, according to CoinDesk.
The declines in cryptocurrencies follow Wall Street losses on Thursday. The Nasdaq was down almost 5% this week, and the S&P 500 is into its third straight week of losses.
As the 10-year U.S. Treasury yield spiked earlier this week, rising rates have caused investors to shed their positions in riskier assets. The Federal Reserve have also indicated it plans to begin reducing its balance sheet, as well as tapering of bonds and raising interest rates.
A common investment case for bitcoin is that it serves as a hedge against rising inflation as a result of government stimulus, but analysts are saying the risk is that a more hawkish Federal Reserve may take the wind out of bitcoin’s sails.
