Digital Assets Drop as Uncertainty Over Fed Rate Cut Lingers

The CoinDesk 20 (CD20) and bitcoin are both down, with the CD20 index dropping 7% and bitcoin trading 5% lower. The market is being impacted by uncertainty over interest rates, with expectations for a Fed rate cut in September. The majority of CD20 constituents are experiencing bigger losses than bitcoin, with Ether, Solana, and XRP all down. There has been $175 million in long liquidations over the past 24 hours, and BTC has seen a 13% drop in the last week. The Fed is expected to cut rates in September due to weaker than expected private sector job growth. Citi Research predicts eight rate cuts starting in September 2024, while Polymarket bettors predict 1-2 rate cuts by the end of the year. The European Union's decision to impose steep tariffs on Chinese electric vehicles and the potential for a hung parliament in France are also impacting market sentiment.