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Bitcoin (BTC) Price Drops to 2-Month Low After Fed Meeting Minutes
The worsening macroeconomic climate and the collapse of industry giants such as FTX and Terra have weighed on the price of bitcoin this year.
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Bitcoin The price fell to around $57,000 apiece on Thursday, hitting a two-month low after the U.S. Federal Reserve released minutes from its June meeting, which indicated the central bank was not yet ready to cut interest rates.
Around 2:30 p.m. London time, the digital currency fell about 5 percent 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 site CoinGecko. Bitcoin has since pared its losses and was trading at $57,932.57, down 3.4 percent as of 5:05 p.m. London time.
Rival token Ether, the world’s second-largest cryptocurrency, fell 5% to $3,120.
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It comes after the Federal Reserve on Wednesday minutes released from the June meeting, which showed officials are reluctant to lower interest rates until further data shows inflation is moving sustainably toward the central bank’s 2% 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 spot Bitcoin exchange-traded fund (ETF) in the United States.
ETFs allow investors to buy a product that tracks the price of bitcoin without owning the underlying cryptocurrency. Cryptocurrency advocates say this has helped legitimize the asset class and make it easier for larger institutional investors to get involved.
Since then, however, bitcoin has traded in a range of about $59,000 to $72,000.
Recently, the world’s largest cryptocurrency has come under pressure from news of the collapse of bitcoin exchange Mt. Gox which is preparing to distribution of approximately 9 billion dollars of coins to users, which is should lead to some significant sales action.
On Thursday, a small amount of bitcoin was moved from three wallets previously associated with Mt. Gox, according to Arkham Intelligence. The largest movement was $24 worth of cryptocurrency. It was not immediately clear whether this transaction was made in connection with Mt. Gox’s refund plan.
Elsewhere, the German government on Thursday sold about 3,000 bitcoins, worth approximately $175 million at today’s prices, from a pile of 50,000 bitcoins seized in connection with the Movie2k movie piracy operation, according to blockchain analytics firm Arkham Intelligence.
Arkham, who is monitoring the German government’s bitcoin wallet, said the assets were transferred to cryptocurrency exchanges Kraken, Bitstamp and Coinbase, as well as a separate, unidentified wallet. “These funds are likely moving to an institutional or OTC custodian,” Arkham said. She said in a post on X.
However, analysts at crypto data and research firm CCData said in a research report on Tuesday that bitcoin has not yet reached the at the top of its current appreciation cycle and will likely 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 preceded a period of price expansion that can last 12 to 18 months “before producing a cycle peak.”
The last bitcoin halving took place on April 19th of this year, so those historic times have not yet passed.
“Furthermore, we have observed a decline in trading activity on centralized exchanges for nearly two months after the halving event in previous cycles, which appears to have mirrored this cycle. This suggests that the current cycle could expand further into 2025,” CCData said.
Meanwhile, bitcoin proponent Tom Lee told CNBC: “Box of squeaks“Monday that he Still Sees Bitcoin Hit $150,000 Despite ‘Surge’ From Impending Mt. Gox Cashout of tokens to creditors.
“If I was a cryptocurrency investor, knowing that one of the big swings was going to disappear in July, I would have thought that was a good reason to expect a pretty sharp rebound in the second half of the year,” Lee, co-founder and head of research at Fundstrat Global Advisors, said in a television interview.