On Monday, the price of bitcoin fell below $64,000 due to a lack of optimism among investors amid growing speculation about lower interest rates in the United States. This was reported by UNN with reference to Investing.
Details
It is noted that the sharp drop in the dollar, following weaker-than-expected nonfarm payroll data, was the biggest support for bitcoin over the weekend. This helped the token recover after it fell to around $59,000 last week, which is about 22% below its record high in March.
Bitcoin fell by 0.3% over the past 24 hours to $63,513.8 by 08:52 ET (12:52 GMT)
As explained in the publication, the price of bitcoin is benefiting from some bets on a rate cut. Thus, currently , markets are pricing in an increased probability of a 25 basis point cut by the Federal Reserve in September. Such a scenario bodes well for cryptocurrencies, given that they typically thrive in low-rate, high liquidity environments.
The cooling labor market also gives the Fed additional impetus to cut interest rates. At the same time, inflation, which is a key factor for the Fed, remains comfortably above the central bank's 2% per annum target.
Investing explains that the short-term growth of bitcoin was restrained by the expectation of new signals on US rates, in particular from a number of Fed officials who are going to speak in the coming days.
Despite this , despite the recovery over the weekend, bitcoin remained within the trading range seen throughout most of March and April.
However, capital flows into Bitcoin investment products, including the spot exchange-traded funds approved earlier this year, have slowed significantly over the past month.
Thus, over the past three weeks, Bitcoin ETFs have seen capital outflows.
Addendum
Meanwhile, other major cryptocurrencies showed mixed dynamics on Monday, reflecting uncertainty in the overall market.
In particular, the world's No. 2 cryptocurrency, Ethereum, fell by 1.2% to $3,095.04. XRP remained unchanged on the day, while Solana gained 3%.
Bitcoin remained the only driver of cryptocurrency valuation, with the token accounting for almost 55% of the total value of the cryptocurrency.
It is noted that according to the latest data, real users account for less than 10% of transactions with stablecoins
The supply in the stablecoin market is currently estimated at around $150 billion, with Tether (USDT) and USD Coin (USDC) dominating the market with 75% and 22% shares respectively
The publication adds that in other cryptocurrency-related developments, less than 10% of stablecoin transaction volumes are organic or come from real users.
It is also noted that a consistent increase in the monthly number of active stablecoin users is recorded, which amounts to 27.5 million across all networks.
Recall
Bitcoin and ethereum prices are declining due to investors' fears of stagflation, a scenario of high inflation and low economic growth in the United States, which poses risks to high-risk assets such as cryptocurrencies.