Bitcoin sank amid cooling demand for dedicated US exchange-traded funds and ebbing bets on looser Federal Reserve monetary policy.
The digital asset fell as much as 5.3% before paring some of the drop to change hands at $66,920 as of 7:15 a.m. Tuesday in London. Tokens earlier favored by the meme crowd such as Pepe and dogwifhat also slumped, consigning a gauge of smaller digital assets to its biggest two-day slide in about two weeks.
This year’s steep crypto rally is losing steam as lingering US price pressures lead investors to curb wagers on Fed interest-rate cuts, bolstering Treasury yields and the dollar. That’s a more difficult backdrop for speculative corners of global markets such as the digital-asset sector.
The changed views about the Fed are having an impact “across crypto, where there has been a selloff as the week gets underway — no sector is unaffected, especially those where prices have outperformed Bitcoin over last six months, for example memes,” said Stefan von Haenisch, head of trading at OSL SG Pte.
Bitcoin has shed about 10% since hitting a peak of $73,798 in mid-March. A flood of daily inflows into US spot-Bitcoin ETFs has eased, weighing on the largest digital asset. On Monday, investors pulled a net $86 million from the batch of 10 products, which have attracted about $12 billion since going live on Jan. 11, according to data compiled by Bloomberg.
The crypto market looked “weak” over the past 12 hours in the wake of the latest US economic data, said Richard Galvin, co-founder of DACM.
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Lionel Messi wins the Ballon d'Or 2023. EPA -
Soccer Football - 2023 Ballon d'Or - Chatelet Theatre, Paris, France - October 30, 2023 FC Barcelona's Aitana Bonmati after winning the women's Ballon d'Or REUTERS / Stephanie Lecocq -
Ballon d'Or 2023 winner Argentine international Lionel Messi (L) is joined on stage by his three sons and his Argentine teammates goalkeeper Emiliano Martinez, winner of the Yashin Trophy for best goalkeeper, Lautaro Martinez (2R) and Julian Alvarez (R) during the Ballon d'Or 2023 ceremony at the Theatre du Chatelet in Paris, France, 30 October 2023. EPA / MOHAMMED BADRA -
Ferran Soriano CEO of Manchester City makes a speech after the team received the Men's Club of the Year award during the Ballon d'Or 2023 ceremony at the Theatre du Chatelet in Paris, France, 30 October 2023. EPA / MOHAMMED BADRA -
TOPSHOT - (COMBO) This combination of pictures created on October 30, 2023 shows Inter Miami CF's Argentine forward Lionel Messi (L) holding his 8th Ballon d'Or award and FC Barcelona's Spanish midfielder Aitana Bonmati (R) holding her Woman Ballon d'Or award during the 2023 Ballon d'Or France Football award ceremony at the Theatre du Chatelet in Paris on October 30, 2023. (Photo by FRANCK FIFE / AFP) -
TOPSHOT - Manchester City Spanish CEO Ferran Soriano (2ndR) walks on stage with the trophy as Manchester City receives the Men's Best Club of the Year trophy, next to Manchester City's Portuguese defender Ruben Dias (L), Manchester City's Spanish midfielder Rodri, Manchester City's Brazilian goalkeeper Ederson Santana de Moraes and Ivorian former football player and Manchester City's Argentinian forward Julian Alvarez during the 2023 Ballon d'Or France Football award ceremony at the Theatre du Chatelet in Paris on October 30, 2023. (Photo by FRANCK FIFE / AFP) -
Inter Miami CF's Argentine forward Lionel Messi (L) poses with his trophy and his children (bottom), next to Aston Villa's Argentine goalkeeper Emiliano Martinez (Top 2L), Inter Milan's Argentine forward Lautaro Martinez (2R) and Manchester City's Argentine forward Julian Alvarez (R) during the 2023 Ballon d'Or France Football award ceremony at the Theatre du Chatelet in Paris on October 30, 2023. (Photo by FRANCK FIFE / AFP) -
(COMBO) This combination of file photographs created on October 30, 2023, shows Barcelona's Argentinian forward Lionel Messi reacting as he receives the Ballon d'Or football award (from bottom, R to L) for the year 2009 in Boulogne-Billancourt, outside Paris, on December 6, 2009; for the year 2010 in Zurich, on January 10, 2011; for the year 2011 in Zurich on January 9, 2012; for the year 2012 in Zurich on January 7, 2013; for the year 2015 in Zurich on January 11, 2016; for the year 2019 in Paris on December 2, 2019; for the year 2021 in Paris on November 29, 2021; for the year 2023 in Paris on October 30, 2023. Lionel Messi won the men's Ballon d'Or award for a record-extending eight time at a ceremony in Paris on October 30, 2023. (Photo by AFP) -
Soccer Football - 2023 Ballon d'Or - Chatelet Theatre, Paris, France - October 30, 2023 Inter Miami's Lionel Messi with the men's Ballon d'Or REUTERS / Stephanie Lecocq -
Soccer Football - 2023 Ballon d'Or - Chatelet Theatre, Paris, France - October 30, 2023 FC Barcelona's Aitana Bonmati after winning the women's Ballon d'Or REUTERS / Stephanie Lecocq
The figures showed that US manufacturing unexpectedly expanded for the first time since September 2022 and that input costs climbed. Following the report, the amount of Fed easing priced into swap contracts for this year slid to around 65 basis points — less than forecast by policymakers.
The supply of new Bitcoin tokens is set to halve this month, a four-yearly event some traders view as a prop for the cryptocurrency. Others argue further gains will be hard to come by given the token has quadrupled since the start of 2023.
co-founder of DACM
