Over $100 billion wiped out from crypto market due to the threat of a recession

After Treasury Secretary Janet Yellen provided a solemn crypto warning. As a result, the cryptocurrency market lost almost $100 billion.

Bitcoin has now plunged to $25,600, its lowest level since late 2020. Fears of a recession are affecting the crypto market, which may drive investors away from riskier investments.

In the last 24 hours, altcoins also dropped. Around the time of writing, Ethereum is trading at $1,346, down 70% from its all-time high of $4,900 in November 2021.

Cryptocurrencies have been entangled in the same downward spiral as stock markets.

In recent months, the crypto market has become more connected with traditional equity markets.

In addition, crypto prices have plummeted in lockstep with the S&P 500, which is down 2.9%, and the Nasdaq, which is down 3.5%.

This new bleak turn of events comes as the Federal Reserve prepares to hike interest rates again next week during a two-day meeting.

Earlier this week, Treasury Secretary Janet Yellen warned against putting crypto in 401(k) plans, adding to the pessimistic outlook.

Initial expectations for the interest rate hike were for a 50-basis-point increase, but new data from the recently released consumer price index report has generated fears that the Fed could act more aggressively, potentially triggering a recession.

Following the release of the consumer price index report, crypto influencer Anthony Pompliano stated, "The Federal Reserve is now backed into a corner."