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Bitcoin plunged. Equities swooned.

Wednesday's assets rally seemed like a distant memory as investors faced the cold reality of higher interest rates and a global economy that is shaking to its core.

The largest cryptocurrency by market capitalization was down 10% at one point, dropping below $36,000, its lowest level since January. Bitcoin was more recently trading just above $36,500, off about 8% over the past 24 hours. Ether, the second largest crypto, was trading at about $2,750, its lowest mark since March and down 6.5% from the previous day.

Other major altcoins fell significantly into the red a day after a relief rally that followed the Federal Reserve's long-awaited announcement of a half-point interest rate hike with ADA, AVAX and AXS down 10%, 11% and 12%, respectively at one point.

On Wednesday, investors had piled into cryptos and other higher risk assets after Fed Chairman Jerome Powell highlighted the strength of the U.S. economy and said that the Fed wouldn't consider a three-quarter point increase at its next meeting. Powell's comments soothed investors, who have been fearful that the Fed's recent aggressiveness will send the U.S. economy into recession. Those fears returned with a vengeance on Thursday as companies weighed the impact of rising prices on consumer spending that has fueled economic growth.

Equity markets were hard-hit with the tech-focused Nasdaq plummeting over 1,000 points, its poorest performance since 2020. The S&P 500 and Dow Jones Industrial Average each tumbled over 3%. Even gold, a usual comfort zone for risk-shy investors dropped almost a percentage point.

"There was a complete loss of confidence on Wall Street," Oanda Americas Senior Market Analyst Edward Moya told CoinDesk. "Yesterday's risk-on rally, which sent equities, cryptos and all risky assets higher as investors are starting to have doubts with the global economic recovery. There's a major, de-risking moment happening that's sending cryptos down sharply."

Moya said that Powell may have overplayed his hand in telegraphing the Fed's unwillingness to boost rates in larger increments. "He showed the markets that he might not be ready to fully fight inflation," he said, adding that support at $33,000 will be key and that volatility similar to the past two days is likely to repeat. "We should not be surprised if we continue to see those types of swings over the next several days."

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