Jul 05, 2024 08:48 AM IST
Bitcoin shed 2.5% to change hands at about $56,870 as of 9:25 a.m. Friday in Singapore, while smaller coins like Ether and XRP also nursed losses.
Bitcoin sank for a fourth consecutive trading session, part of a wider crypto selloff that contrasts with recent record highs in global stocks.
The digital asset shed 2.5% to change hands at about $56,870 as of 9:25 a.m. Friday in Singapore, while smaller coins like Ether and XRP also nursed losses.
Crypto speculators currently face a range of challenges, including waning demand for US Bitcoin exchange-traded funds, signs that governments are disposing of seized tokens and the hard-to-parse impact of US political flux.
On top of that, administrators of the failed Mt. Gox exchange are returning a hoard of Bitcoin to creditors in stages. Speculators are uncertain how much of the $8 billion haul will end up being sold. A Mt. Gox-linked wallet moved $2.7 billion worth of the token on Friday, according to Arkham Intelligence.
Correlation Frays
Meanwhile MSCI Inc.’s gauge of global stocks is hovering near a record high and a short-term, 30-day correlation between Bitcoin and the index is plunging. The question is whether risk aversion for crypto is isolated or heralds a circumspect quarter for mainstream investments too after a strong first-half for shares.
“There’s just a general lack of buzz in crypto markets right now,” said Stefan von Haenisch, head of trading at OSL SG Pte. “Most news that is currently being spread, for example Mt. Gox selling, is more bearish in nature.”
Von Haenisch said crypto needs more dovish notes on monetary policy from the Federal Reserve, adding “one to two rate cuts, coupled with Fed balance sheet expansion, are two key ingredients that crypto is really waiting for.”
Investors are awaiting US jobs data later Friday for the latest clues on the outlook for Fed policy. Soft recent economic reports have bolstered the case for the US central bank to loosen monetary settings in coming months.
Bitcoin hit an all-time peak of $73,798 in March, buoyed by unexpectedly strong demand for inaugural US ETFs for the token. The inflows have since ebbed, taking Bitcoin lower and casting a pall over the rest of the digital-asset market.
Approvals for debut US ETFs for No. 2 ranked token Ether are pending, but interest in the products could be mixed if the crypto selloff continues.
