Bitcoin’s value took a nosedive to a two-week low amidst dwindling demand for US exchange-traded funds and apprehensions regarding the Federal Reserve’s ability to swiftly reduce interest rates. The cryptocurrency has experienced a continuous decline following its record high close to $73,798 on March 14, raising doubts about its current peak. As of Wednesday afternoon in Singapore, Bitcoin saw a 4.5% drop, trading at $60,900.
The excitement surrounding US spot-Bitcoin ETFs, which launched on January 11, has cooled down significantly. Despite attracting a net inflow of $11.7 billion thus far, these ETFs witnessed their largest outflow on Tuesday. The exit from the Grayscale Bitcoin Trust contributed to a $326 million outflow, alongside diminished subscriptions for similar offerings from Fidelity Investments and BlackRock Inc.
Bitcoin’s decline coincides with uncertainty over whether the Federal Reserve will revise its rate-cut projections amidst concerns about inflation exceeding targets. According to Tony Sycamore, a market analyst at IG Australia Pty, the recent struggles of Bitcoin can be attributed in part to the Federal Reserve’s outlook, testing the commitment of latecomers who bought in above $60,000, anticipating sustained inflows into the new Bitcoin ETFs.
The broader crypto market has witnessed a loss of approximately $460 billion since reaching $2.9 trillion last week. Notably, tokens like Ether, BNB, and Dogecoin, favored by meme enthusiasts, are all experiencing losses.
The substantial liquidation of bullish crypto wagers in the past 24 hours, amounting to about $511 million according to Coinglass data, indicates a potential impediment to a swift recovery in the digital-asset market. Despite optimistic expectations regarding Bitcoin’s future due to an impending reduction in token supply growth, a prevailing pessimistic sentiment is evident, highlighted by recent slumps in crypto-linked stocks such as Coinbase Global Inc., MicroStrategy Inc., and Monex Group.
