Bitcoin, Ethereum, XRP Fall Amid Crypto Flash Crash. Why They’ve Given Up Gains.

Bitcoin and other cryptocurrencies typically gain when interest rates are lower. (JACK GUEZ/AFP via Getty Images)

Bitcoin and smaller cryptocurrencies fell sharply over the weekend, erasing the boost they got from Federal Reserve Chair Jerome Powell’s remarks on interest rates.

The price of the world’s largest cryptocurrency was down 2.8% over the past 24 hours to $111,382, according to CoinDesk data. Ether and XRP fell 2.9 and 2.6%, respectively. Those were bigger declines than stocks saw—the S&P 500 was edging down just 0.2%.

Friday’s surge seems to have attracted new sellers, pushing Bitcoin below its 50-day average, FxPro analyst Alex Kuptsikevich noted.

Created with Highcharts 9.0.1CoinDesk Bitcoin Price Index (XBX)Source: CoinDesk

Created with Highcharts 9.0.1Aug. 22Aug. 25111,000112,000113,000114,000115,000116,000117,000118,000

Powell’s speech at the Jackson Hole Economic Symposium Friday sent both digital assets and stocks higher after he signaled a rate cut is around the corner. Lower rates matter for cryptos as they increase traders’ appetite for risk assets such as stocks and digital assets, as opposed to interest-yielding investments such as bonds.

Several crypto news outlets also reported that a so-called Bitcoin whale—an individual or entity that holds a large amount of the token—started to unload assets, triggering a flash crash on Sunday.

Crypto-related stocks were down just after the market opened Monday. The largest corporate holder of Bitcoin Strategy , formerly known as MicroStrategy, fell 4.4% while crypto exchange Coinbase Global dropped 3.5%.

Write to Elsa Ohlen at elsa.ohlen@barrons.com