Bitcoin (BTC) price slips to 2-month low after Fed meeting minutes

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, indicating the central bank is not yet ready to cut interest rates.

By around 2:30 p.m. London time, the digital currency was down about 5% in 24 hours to $56,837, falling below $57,000 for the first time since May 1, according to data from crypto ranking site 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 Ether token, 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% target.

Higher interest rates are typically less favorable for bitcoin and other cryptocurrencies as they reduce investors’ appetite for risk.

Bitcoin hit an all-time high above $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 proponents say this has helped legitimize the asset class and make it easier for larger institutional investors to get involved.

Since then, however, bitcoin has been trading in a range between about $59,000 and $72,000.

Recently, the world’s largest cryptocurrency has been under pressure from news of the collapse of bitcoin exchange Mt. Gox, 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 whether this transaction was made in connection with the repayment plan of Mt. Gox.

Elsewhere, the German government on Thursday sold roughly 3,000 bitcoins — worth roughly $175 million at today’s prices — out of a 50,000 bitcoin stash seized in connection with the Movie2k movie piracy operation, according to blockchain analysis firm Arkham Intelligence.

Arkham, which is tracking 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 will likely be transferred to a deposit for an institutional or OTC service,” Arkham 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 top of the current valuation cycle and is likely to hit a new all-time high.

According to the report, historical market “cycles” have shown that the so-called bitcoin “halving” event – which cuts the supply of new bitcoins to the market – has always been preceded by a period of price expansion that can last from 12 to in 18 months. before producing a cycle peak”.

The last bitcoin halving took place on April 19 of this year, so those timelines haven’t passed yet.

“Furthermore, we have observed a decline in trading activity on centralized exchanges for nearly two months following the halving event of previous cycles, which appears to have mirrored this cycle. This suggests that the current cycle may extend further into 2025,” CCData said.

Meanwhile, bitcoin bull Tom Lee told CNBC’s “Squawk Box” on Monday that he still sees bitcoin reaching $150,000 despite the “overshoot” from the upcoming token disbursement from Mt. Gox to creditors.

“If I were invested in crypto, knowing that one of the biggest overshoots is going to disappear in July, I would think that’s a reason to expect a pretty sharp rebound in the second half,” Lee, an associate at Fundstrat Global Advisors. founder and head of research, said in a television interview.