The deterioration of the macroeconomic climate and the collapse of industry giants such as FTX and Terra have affected the price of bitcoin this year.
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of Bitcoin The price fell to around $57,000 a piece on Thursday, hitting a two-month low after the US Federal Reserve released minutes from its June meeting that said the central bank was not yet ready to cut interest rates.
Around 14:30 London time, the digital currency was down 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 ranking website CoinGecko. Since then, bitcoin has 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.
It comes after the Federal Reserve on Wednesday released minutes from its June meeting that showed officials are reluctant to cut interest rates until additional data shows inflation is moving steadily toward the central bank’s 2 percent target.
Higher interest rates are usually less favorable for bitcoin and other cryptocurrencies as they reduce investors’ risk appetite.
Bitcoin hit an all-time high of over $73,700 in March this year after the Securities and Exchange Commission approved the first US bitcoin exchange-traded fund, or ETF.
ETFs allow investors to buy a product that tracks the price of bitcoin without owning the underlying cryptocurrency. Crypto supporters say this helped legitimize the asset class and make it easier for larger institutional investors to participate.
Since then, however, bitcoin has traded in a range between about $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 distribute about $9 billion worth 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 linked to Mount Gox, according to Arkham Intelligence. The biggest move was for the cryptocurrency at $24. It was not immediately clear if this transaction was made in connection with the repayment plan of Mt. Gox.
In other news, the German government on Thursday sold about 3,000 bitcoins — worth about $175 million at today’s prices — from a stash of 50,000 bitcoins seized in connection with movie piracy operation Movie2k, according to blockchain analytics firm Arkham Intelligence.
Arkham, which monitors the German government’s bitcoin wallet, said the assets were moved to crypto exchanges Kraken, Bitstamp and Coinbase, as well as a separate, unidentified wallet. “These funds are likely to be moved to a deposit for an institutional service or OTC,” Arkham he said in a post on X.
Can bitcoin still gain from here?
However, analysts at crypto data and research firm CCData said in a research report on Tuesday that bitcoin has not yet reached peak of its current appreciation cycle and is likely to reach a new all-time high.
According to the report, historical market “cycles” have shown that bitcoin’s so-called “halving” event — which reduces the supply of new bitcoins to the market — has always been preceded by a period of price expansion that can last 12 to 18 months.” . before you create a bicycle’.
The last bitcoin halving took place on April 19th of this year, so these historical timelines have yet to pass.
“Furthermore, we have seen trading activity on central exchanges decline for nearly two months after halving in previous cycles, which appears to reflect this cycle. This suggests that the current cycle could extend further to 2025,” CCData said.
Meanwhile, bitcoin bull Tom Lee told CNBC’s “Squawk Box” on Monday that he still sees bitcoin hitting $150,000 despite the “overhang” from the upcoming token disbursement from Mt. Gox to creditors.
“If I had invested in crypto, knowing that one of the biggest bumps is going to disappear in July, I would think that’s a reason to expect a fairly sharp recovery in the second half,” said Lee, a partner at Fundstrat Global Advisors. founder and head of the research, said in the television interview.
