(Bloomberg) — As September draws to a close, Bitcoin is ending the quarter with its first quarterly decline this year.
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The largest cryptocurrency by market capitalization has fallen about 11% since June and was trading at about $26,970 in New York on Saturday. It soared 83% in the first six months of this year, partially recovering from the 64% plunge seen in 2022, when the digital asset sector was hit by scandals and bankruptcies.
Amid an uncertain macro outlook, Bitcoin has languished in a narrow trading range since late second quarter. The Fed kept interest rates on hold last Wednesday, but signaled they could rise for an extended period of time. Higher interest rates tend to make riskier assets less attractive.
“The Federal Reserve’s hawkish stance has increased investor anxiety, leading to declines in both traditional and digital asset markets,” said Hossam Mahmood, research analyst at CCData. .
In the nine weeks ending in mid-September, investors withdrew nearly $500 million from crypto products, according to a report from CoinShares. Bitcoin accounted for 85% of the outflow amount, amounting to $45 million.
Read more: Crypto fund loses nearly $500 million in 9 weeks
On Thursday, the U.S. Securities and Exchange Commission postponed a decision on BlackRock Inc.’s Spot Bitcoin ETF proposal, days after deferring decisions on Ark21Shares and Global X until January.
“Investors today are very excited about the potential for Bitcoin ETFs to spark a new wave of demand,” said Peter Chill, head of macro strategy at Burian Capital. “It would have been a huge help because a few years ago it would have been difficult to own cryptocurrencies, but it’s not that hard now. not.”
But with the prospect of a U.S. federal government shutdown growing, some Bitcoin supporters are predicting a rally similar to the one that occurred in response to the local banking crisis earlier this year. In March, three small U.S. banks collapsed within five days, sending Bitcoin up about 25% in a month.
Read more: Bitcoin evacuation appeals touted again as prospects of US government shutdown grow
“There are signs that the Bitcoin correction phase is maturing,” said Will Tamplin, senior analyst at Fairlead Strategies. “It is above the 50-day moving average, reflecting improved momentum due to oversold conditions.”
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