c994d02922b4f232d0dcff70499775a7084fa52a Bitcoin Plummets to Two Month Low After Fed Minutes Raise Inflation Worries
Type Here to Get Search Results !

Bitcoin Plummets to Two Month Low After Fed Minutes Raise Inflation Worries


(Canva Edited Image)

Bitcoin, the leading cryptocurrency, experienced a significant drop to its lowest level in nearly two months following the release of the minutes from the Federal Reserve's July policy meeting. The minutes expressed concerns about potential inflation risks, leading to speculation that the central bank may implement additional interest rate hikes. As a result, Bitcoin fell by approximately 4% to $27,901.60, its lowest point since June 20.

The correlation between Bitcoin and traditional stock markets is currently at its lowest level in two years, signaling a divergence in their performances. However, Coin Metrics reports that in 2022, Bitcoin reached an all-time high in response to the Federal Reserve's inflation-taming measures.

Sylvia Jablonski, Chief Investment Officer at Defiance ETFs, highlighted that while inflation may drive growth for crypto assets, it also triggers risk-averse behavior among investors, who view Bitcoin as a riskier asset during economic downturns. She suggested that the recent sluggish trading, low volume, and the hawkish stance of the Federal Reserve are likely contributing to the constrained range of Bitcoin prices.

Bitcoin and ether's volatility over the past 90 days has dropped to multiyear lows at 35% and 37% respectively, according to Kaiko. John Todaro from Needham commented that Bitcoin's rally to $30,000 in late June lacked significant strength due to light trading volumes. Furthermore, the highly anticipated launch of a spot Bitcoin exchange-traded fund (ETF) has faced setbacks, dampening positive sentiment in the cryptocurrency market.

Todaro outlined the remaining catalysts for Bitcoin, including halving expectations scheduled for Q1-Q2 '24 and any further comments from the U.S. Securities and Exchange Commission regarding cryptocurrency ETFs. With the spot Bitcoin ETF unlikely to receive approval in the near term and expectations of prolonged higher interest rates, Bitcoin and the broader crypto market are experiencing a pullback.


Top post Ads

Below Post Ad