US Dollar Strengthens, Bitcoin Falls 4% Today

Amid the Russian invasion of Ukraine, investors in the global financial market are avoiding risky assets such as cryptocurrencies and shifting to safe haven assets, such as the US dollar.

According to Coinbase, the cryptocurrency market corrected by 3.62% in the last 24 hours. The price of Bitcoin (BTC) traded down 4.04% to Rp598.39 million per coin in Thursday, March 4, 2022 trading, as of 4:35 PM WIB.

Solana led the decline among large-capitalization cryptocurrencies. The digital currency with the code SOL plummeted 7.29% to Rp1.33 million per coin. Ethereum (ETH) followed, correcting 5.91% to Rp39.3 million per coin, and Polkadot (DOT) fell 5.22% to Rp248,320 per coin.

Avalanche (AVAX) also recorded a decrease of 4.66% to Rp1.14 thousand per coin, while Cardano fell 4.17% to Rp12.63 thousand per coin, and Dogecoin (DOGE) fell 3.84% to Rp1.83 thousand per coin.

Then there's XRP (XRP) down 3.67% to Rp10.62 thousand per coin, Binance Coin (BNB) correcting 2.61% to Rp5.7 million per coin, and Terra (Luna) down 0.55% to Rp1.32 million per coin.

These ten currencies have a combined market capitalization of over Rp240 trillion. Bitcoin is the largest, with a capitalization reaching Rp11.37 quadrillion.

Meanwhile, according to Yahoo Finance data, the US dollar index (DXY) traded up 0.32% to 98.11 in this weekend's trading as of 5:27 PM WIB. This figure is its highest level since early June 2020.

The rise in the US dollar is driven by concerns that the US central bank (The Federal Reserve/The Fed) will soon raise its benchmark interest rate, which is currently at its lowest level of 0.25%.

High US inflation has fueled speculation that the Fed will raise the benchmark interest rate aggressively and faster than previously anticipated.