Cryptocurrency prices are in retreat as a rout in technology stocks pressures the broader market.
The price of Bitcoin (BTC), the largest cryptocurrency by market capitalization, is down 3% in early trading on June 23 and changing hands at $62,300 U.S.
Other cryptocurrencies such as Ethereum (ETH), Solana (SOL), and Dogecoin (DOGE) are each down 4% as digital assets fall alongside technology stocks.
The tech sector is experiencing a global rout as high-flying and richly valued stocks tied to the artificial intelligence (A.I.) trade retreat.
In premarket trading, the technology-heavy Nasdaq Composite (NDAQ) index is down 870 points, or nearly 3%.
Risk assets are plunging as the stocks of memory chip makers tied to A.I. such as SanDisk (SNDK) and Micron (MU) decline as much as 10%.
Those memory chip stocks had more than tripled year-to-date but are now pulling back hard as investors take profits and reallocate capital.
The rout in technology stocks is not confined to the U.S. market. In South Korea, the benchmark Kospi index is down 10% on the day as A.I.-related stocks crumble after a big rally this year.
Analysts say markets are spooked after the U.S. Federal Reserve indicated that interest rates are likely to move higher in this year’s second half.
Inflation in the U.S. is currently running at an annualized rate of 4.2%, more than double the central bank’s 2% target.
Higher interest rates are bad for risk assets such as crypto, and market observers say that digital assets are pulling back as investors get more defensive with their portfolios.
Bitcoin and other cryptocurrencies had seen their prices rise in recent days as crude oil prices continue to move lower, easing inflation pressures.
However, those gains have quickly unwound as capital shifts into value stocks such as Walmart (WMT) and Coca-Cola (KO).
Cryptocurrencies such as Bitcoin trade around the clock: 24 hours a day, seven days a week.
