- Bitcoin hit a 21-month low, dropping to $57,742 amid rate hike concerns
- US Federal Reserve's hawkish stance fuels expectations of higher interest rates
- Investors withdrew over $4 billion from US-listed Bitcoin ETFs in June
| Bitcoin fell to a fresh 21-month low as the prospect of higher interest rates and concerns about the largest corporate buyer of the token weakened sentiment. Bitcoin dropped as much as 1.5% to $57,742 in Asia trading on Wednesday, its lowest level since Sept. 17, 2024, before steadying by 10 a.m. in Singapore. Hawkish comments by US Federal Reserve policymakers are fueling expectations for higher rates, encouraging capital away from assets like cryptocurrencies that don't pay a yield. Investors pulled more than $4 billion from US-listed Bitcoin exchange-traded funds in June, the most since they launched two years ago. Bitcoin "has faced growing headwinds from shifting Fed rate expectations and a stronger US dollar," said Tony Sycamore, an analyst at IG Australia. A US nonfarm payrolls report due later this week "has the potential to add further pressure if it reinforces a hawkish tilt from the Fed," he said. ALSO READ: Crypto Market Has Lost Equivalent Of Half Of India's GDP In Eight Months — Here's Why In addition, investors have reversed an initial vote of confidence in Michael Saylor's financing overhaul at Strategy Inc., raising fresh concerns that one of the biggest buyers of Bitcoin may no longer be a consistent source of demand. While investors initially welcomed the prospect of stock buybacks and a larger cash reserve, the focus quickly shifted to Strategy's newfound flexibility to sell Bitcoin and prioritize balance-sheet management over relentless accumulation. Bitcoin has now fallen more than 50% from its record high above $126,000 in October last year and is below its 200-week moving average, a technical level that can signal a prolonged bear market.  At his first press conference as Fed chairman last month, Kevin Warsh made clear the central bank won't tolerate high inflation, spurring expectations for higher rates and boosting the US dollar. Other Fed officials have also recently indicated the possibility of tighter policy. Federal Reserve Bank of Cleveland President Beth Hammack told CNBC Tuesday that the central bank may need to raise rates to bring inflation down to its 2% goal. |
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