Fed Jitters Tank Crypto Markets—Here’s Why Traders Are Sweating

Another day, another crypto bloodbath. Digital assets are taking a beating as Wall Street panics over the Fed’s next move—because nothing says ’decentralized’ like hanging on Powell’s every word.

Market jitters hit hard after mixed signals from the Fed chair. Bitcoin and altcoins nosedived as traders priced in the worst—proving once again that crypto’s ’uncorrelated’ narrative dies fast when traditional finance sneezes.

Bonus jab: Meanwhile, hedge funds are still pretending they ’understand the macro environment’ while trading on Twitter rumors.

Crypto mining stocks dip

However, while the overall crypto market showed signs of recovery, the same couldn’t be said for crypto mining and related tech stocks.

As per data from Google Finance, Riot Platforms [RIOT] closed on the 28th of May with an 8.32% decline, while CleanSpark [CLSK] and Marathon Digital Holdings [MARA] saw drops of 7.61% and 9.61%, respectively.

Crypto exchange Coinbase [COIN] also faced a setback, dropping 4.55%.

Meanwhile, MicroStrategy [MSTR], known for its heavy bitcoin holdings, extended its five-day losing streak with a 2.14% dip, amid growing legal troubles.

On a broader note, the S&P 500 also closed the day in the red, slipping by 0.56%.

Why is crypto down today?

The sharp decline in crypto mining and tech-related stocks came shortly after the release of the Federal Open Market Committee’s (FOMC) meeting minutes from the 6th and the 7th of May.

Published on the 28th of May, the document highlighted concerns about the potential challenges ahead for the U.S. economy.

The Fed noted it may face tough decisions if inflation proves more stubborn while growth and employment show signs of weakening.

However, despite mounting pressures, the central bank opted to keep interest rates unchanged at 4.25% to 4.50%.

It cited growing uncertainty surrounding the economic outlook and rising risks of both inflation and unemployment as key reasons behind the pause.

Remarking on the same, trader Chapo noted, 

Source: Chapo/X

Is Trump behind this fallout?

Looking ahead, the market remains on edge as the next Federal Reserve interest rate decision, scheduled for the 18th of June, approaches.

Nearly 97.8% of market participants anticipate that the Federal Reserve will maintain current interest rates, per the CME FedWatch Tool.

Adding to the market’s anxiety is the announcement of TRUMP Media’s ambitious $2.5 billion plan to build a Bitcoin treasury, an initiative that has drawn mixed reactions.

While some view it as a bullish sign for crypto adoption, others are wary of the underlying political motives.

Compounding the uncertainty is the return of a 25% tariff on the EU beginning 1st June, reigniting inflation concerns just months after a temporary truce.

Together, these developments have injected a fresh wave of FUD into an already volatile crypto landscape.