Bitcoin Plummets to a Nearly Two-Year Low — Bloomberg
The price of Bitcoin, the world’s most popular cryptocurrency, fell to its lowest level in the past 21 months, reaching $57,742.
This 1.5% drop during Asian trading on Wednesday, July 1, was the market’s response to the prospect of further interest rate hikes in the U.S. and concerns about the strategies of major corporate players.
The sharp outflow of capital from the cryptocurrency market is driven by investors shifting toward assets with guaranteed returns amid a strengthening U.S. dollar.
Experts emphasize that the rhetoric from U.S. Federal Reserve officials regarding the fight against high inflation is significantly influencing investor sentiment.
“Bitcoin has faced growing challenges amid shifting expectations regarding Fed rate hikes and a strengthening dollar,” noted Tony Sycamore, an analyst at IG Australia.
This view aligns with recent statements by central bank officials, particularly Fed Chair Kevin Warsha, who emphasized the need for decisive action to keep inflation under control.
Additional pressure on the market is coming from the official stance of the Federal Reserve Bank of Cleveland, as articulated by Beth Hammack on June 30.
She suggested the possibility of further interest rate hikes to reach the 2% inflation target, which makes speculative digital assets less attractive for investment.
The situation is exacerbated by statistics on investment instruments: in June, investors withdrew more than $4 billion from U.S.-based Bitcoin ETFs.
This marked the largest outflow in the two-year history of these exchange-traded funds.
A separate cause for concern was the change in strategy by Strategy Inc., a company linked to Michael Saylor.
The market fears that the company, which was previously the main driver of demand for tokens, now has the flexibility to sell Bitcoin to manage its own balance sheet, rather than continuously accumulating assets.
This was reported by Bloomberg.
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