Bitcoin price drops to 62 thousand dollars: what's the reason
Kyiv • UNN
The price of bitcoin dropped to $62,523 amid regulatory concerns, declining interest in cryptocurrency investment products, and a stronger US dollar.
Bitcoin has lost 1.5% over the past 24 hours, dropping to $62,523. It remains in its usual range, and interest in cryptocurrency investment products has been declining for the third week in a row, UNN writes with reference to Investing.com.
Details
The price of bitcoin fell on Wednesday, reversing the gains made over the weekend, due to lingering concerns about the possibility of increased regulatory oversight of the cryptocurrency sector, which discouraged traders from buying.
The world's largest cryptocurrency has maintained the trading range that has characterized it over the past two months, losing momentum after hitting a record high in March. Recent capital flows data released earlier this week point to the third consecutive week of sharp outflows from crypto investment products, including bitcoin, as the initial enthusiasm for the launch of exchange-traded funds earlier this year fades.
The broader cryptocurrency market has also come under pressure due to uncertainty over US interest rates, especially after several Federal Reserve officials this week hinted that the central bank may not change rates in 2024. The US dollar strengthened after its recent falls, reacting to their comments.
Sentiment towards cryptocurrencies is deteriorating due to regulatory difficulties. A recent report found that more than 90% of transactions involving stablecoins, a key element of the crypto market, are of artificial origin, casting doubt on the real demand from consumers. The report also emphasizes possible regulatory measures against stablecoin providers, including industry leader Tether.
Robinhood Markets Inc., which offers a trading app, has reported potential regulatory action from the Securities and Exchange Commission (SEC), which claims that crypto tokens are securities. The SEC is already in litigation with Ripple, the company that issued XRP, and Coinbase, the crypto exchange, over this issue.
The SEC is considering Ethereum, the world's second-largest cryptocurrency, as a possible security and this week postponed its decision to allow Ethereum spot ETFs in the US markets until July, predicting the likelihood of a denial of these applications. This creates uncertainty, which leads to a drop in altcoin prices.
Prices for cryptocurrencies generally declined, also because the US dollar strengthened after Federal Reserve officials said that rates would remain unchanged this year. Ethereum fell by 1.5% to $3,018.85, while Solana and XRP lost 5% and 3%, respectively. High interest rates in the United States could have a negative impact on crypto markets, which usually benefit from low rates and high liquidity.
Recall
The price of bitcoin fell slightly a day earlier amid regulators' concerns and continued outflows from crypto investment products, which indicates a negative attitude toward cryptocurrencies.
