Finance
Bitcoin (BTC) drops to $57,000 ahead of Fed decision
The logo of the cryptocurrency Bitcoin (BTC) can be seen on a coin standing in front of a Bitcoin chart.
Silas Stein | Photo Alliance | Getty Images
Bitcoin On Wednesday, yields slid to the lowest level in more than two months amid broader risk sentiment in markets as investors kept an eye on the U.S. Federal Reserve’s upcoming interest rate decision.
According to data from CoinGecko, the market value of the world’s leading digital currency fell to a low of $56,757.93, falling below $57,000 for the first time since February 28.
Bitcoin last fell 6.3% on Wednesday to a price of $57,505.24.
Rival cryptocurrencies ether, solana and XRP fell 4.5%, 5.9% and 1.4% respectively.
Participants in the crypto market are keeping an eye on the upcoming interest rate decision of the US Federal Reserve. The Federal Open Market Committee will meet Wednesday afternoon to discuss its latest interest rate policy.
Markets have become shakier lately as investors worry about the prospect of a longer path to rate cuts. Investors are looking for clues from Fed Chairman Jerome Powell on what needs to happen before interest rates can fall.
Bitcoin is known to trade more than traditional risk assets, such as stocks. Its backers have described it as a hedge against rising inflation, but the token’s track record has been mixed.
Geoff Kendrick, head of digital asset research at Standard Chartered, said in a note on Wednesday that Bitcoin’s drop below $60,000 “has now reopened a route into the 50-52k range.”
“The driver appears to be a combination of crypto-specific and broader macros,” Kendrick said.
He noted that the main factors affecting the token were five days of consecutive outflows from the US spot bitcoin exchange-traded funds, as well as a deterioration in the macro environment and deteriorating market liquidity.
Kendrick added that the reaction to the launch of spot bitcoin ETFs in Hong Kong earlier this week was “poor”, highlighting small first-day turnover volume for the ETFs in the millions of dollars, despite the net asset positions of the ETFs are solid. .
“Of course, liquidity matters when it matters, but against the backdrop of strong U.S. inflation data and less likelihood of Fed rate cuts, it matters right now,” Kendrick said in the note.
The downward price action in the crypto markets also comes a day after former Binance CEO Changpeng Zhao was sentenced to four months in prison on money laundering charges.
