Bitcoin
Bitcoin (BTC) Price Drops to 2-Month Low After Fed Meeting Minutes
The worsening macroeconomic climate and the collapse of industry giants like FTX and Terra have weighed on the price of bitcoin this year.
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Bitcoins the price fell to around $57,000 apiece on Thursday, hitting a two-month low after the US Federal Reserve released the minutes of its June meeting, indicating the central bank is not yet ready to cut interest rates.
By 2:30 p.m. London time, the digital currency had fallen about 5% in 24 hours to $56,837, falling below the $57,000 mark for the first time since May 1, according to data from cryptocurrency rankings website CoinGecko. Bitcoin has since pared losses somewhat and was trading at $57,932.57, down 3.4% as of 5:05 p.m. London time.
Rival token ether, the world’s second-largest cryptocurrency, fell 5% to $3,120.
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It happens after the Federal Reserve on Wednesday minutes released from the June meeting, which showed that policymakers are reluctant to cut interest rates until additional data shows that inflation is moving sustainably toward the central bank’s 2% target.
Higher interest rates are generally less favorable for bitcoin and other cryptocurrencies as they decrease investors’ risk appetite.
Bitcoin hit an all-time high above $73,700 in March this year after the Securities and Exchange Commission approved the first US spot bitcoin exchange-traded fund (ETF).
ETFs allow investors to buy a product that tracks the price of bitcoin without owning the underlying cryptocurrency. Crypto advocates say this has helped legitimize the asset class and made it easier for larger institutional investors to get involved.
Since then, however, bitcoin has been trading in a range between roughly $59,000 and $72,000.
Recently, the world’s largest cryptocurrency has been pressured by news of the collapse of bitcoin exchange Mt. Gox, which is preparing to distribution of approximately US$9 billion of coins to users, which is expected to lead to some significant selling action.
On Thursday, a small amount of bitcoin was moved from three wallets previously associated with Mt. Gox, according to Arkham Intelligence. The largest movement was $24 worth of the cryptocurrency. It was not immediately clear whether that transaction was made in connection with Mt. Gox’s payment plan.
Elsewhere, the German government on Thursday sold about 3,000 bitcoins — worth roughly $175 million at today’s prices — from a pile of 50,000 bitcoins seized in connection with the movie piracy operation Movie2k, according to blockchain analytics firm Arkham Intelligence.
Arkham, which is tracking the German government’s bitcoin wallet, said the assets were moved to cryptocurrency exchanges Kraken, Bitstamp and Coinbase, as well as a separate, unidentified wallet. “These funds are likely being moved to a deposit for an institutional or OTC service,” Arkham he said in a post on X.
However, analysts at crypto data and research firm CCData said in a research report Tuesday that bitcoin has yet to reach the top of its current appreciation cycle and will likely reach a new all-time high.
According to the report, historical market “cycles” have shown that bitcoin’s so-called “halving” event — which cuts off the supply of new bitcoins to the market — has always preceded a period of price expansion that can last between 12 to 18 months “before producing a cycle top.”
The last Bitcoin halving occurred on April 19th this year, so these historic deadlines have not yet passed.
“Furthermore, we observed a decline in trading activity on centralized exchanges for nearly two months following the halving event in previous cycles, which appears to have mirrored this cycle. This suggests that the current cycle could expand further into 2025,” CCData said.
Meanwhile, bitcoin bull Tom Lee told CNBC:Sound box“Monday he Still Sees Bitcoin Hitting $150,000 Despite “Excess” From Upcoming Mt. Gox Disbursement of tokens to creditors.
“If I were investing in cryptocurrencies, knowing that one of the biggest gluts was going to disappear in July, I would think that would be a reason to expect a pretty sharp recovery in the second half,” Lee, co-founder and head of research at Fundstrat Global Advisors, said in the TV interview.