Bitcoin (BTC) price falls to two-month low after Fed minutes

Bitcoin (BTC) price falls to two-month low after Fed minutes

The deteriorating macroeconomic climate and the collapse of industry giants like FTX and Terra have impacted the price of Bitcoin this year.

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Bitcoin The price fell to around $57,000 per coin on Thursday, hitting a two-month low after the US Federal Reserve released minutes from its June meeting, suggesting the central bank is not yet ready to cut interest rates.

At around 2:30 p.m. London time, the digital currency was down about 5% in 24 hours to $56,837, dipping below $57,000 for the first time since May 1, according to data from cryptocurrency rating site CoinGecko. Bitcoin has since pared some of its losses and is trading at $57,932.57, down 3.4% as of 5:05 p.m. London time.

Rival ether, the world’s second-largest cryptocurrency, fell 5% to $3,120.

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This comes after the Federal Reserve on Wednesday released minutes of its June meeting that showed officials were reluctant to cut interest rates until additional data showed inflation was moving sustainably toward the central bank’s 2% target.

Higher interest rates are generally less favorable for Bitcoin and other cryptocurrencies because they reduce investors’ appetite for risk.

Bitcoin surged to an all-time high of over $73,700 in March of this year after the Securities and Exchange Commission approved the first U.S. spot exchange-traded fund, or ETF.

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 made it easier for larger institutional investors to participate.

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However, since then, Bitcoin has been trading in a range of roughly $59,000 to $72,000.

Recently, the world’s largest cryptocurrency has been under pressure due to news of the collapse of Bitcoin exchange Mt. Gox, which is preparing to distribute nearly $9 billion in coins to users, which is expected to lead to some significant selling.

However, analysts at cryptocurrency data and research firm CCData said in a research report on Tuesday that Bitcoin has not yet reached the top of its current bull 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 reduces the supply of new bitcoins to the market — has always been preceded by a period of price expansion that can last 12 to 18 months before producing the cycle’s top.”

The last Bitcoin halving occurred on April 19th of this year, so these historical time frames are not over yet.

“Furthermore, we have observed a decline in trading activity on centralized exchanges for about two months following the halving event in previous cycles, which appears to reflect this cycle. This suggests that the current cycle could expand further into 2025.

Meanwhile, Bitcoin bull Tom Lee told CNBC’s “Squawk Box” on Monday that he still sees Bitcoin hitting $150,000 despite the “pile-up” from Mt. Gox’s upcoming token swap to creditors.

“If you were invested in crypto, knowing that one of the biggest accumulations was going to go away in July, I would think that’s a reason to expect a very sharp rebound in the second half,” Lee, co-founder and head of research at Fundstrat Global Advisors, said in a television interview.

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