Bitcoin’s price dropped below $90,000 for the first time since mid-November on Monday, sparking investor concern over the Federal Reserve’s interest rate policy. Recent economic data weakened hopes for rate cuts by the US Fed, which has had a significant impact on bitcoin prices.
The cryptocurrency market is highly sensitive to changes in interest rates and other macroeconomic factors. When treasury yields are high, investors tend to move to riskier assets like bitcoin in search of higher returns. However, with the Fed projecting slower pace of rate cuts this year, investor sentiment remains cautious.
Additionally, reports last week revealed a federal judge’s decision allowing the US government to sell some seized bitcoins, sparking fears of a sudden influx of supply into the market. However, experts say that these worries may be unfounded, and the seized currency is likely to be auctioned off instead of hitting crypto exchanges.
Despite the uncertainty, MicroStrategy remains bullish on bitcoin, announcing its 10th consecutive weekly purchase. The company added 2,530 bitcoins worth $243 million to its stash, bringing its total to nearly 450,000. This latest buy brings the company’s total value to close to $41 billion at recent prices.
The broader crypto market has also been affected by bitcoin’s slide, with alternative assets like ether and Solana performing worse than expected. However, XRP has shown some resilience, with a notable increase in price due to potential regulatory developments.
Net inflows into spot bitcoin ETFs remained positive for the week, but even this was unable to prop up bitcoin prices. The latest development highlights the need for investors to stay informed and adapt to changing market conditions.
Source: https://www.investopedia.com/bitcoin-briefly-slides-below-usd90k-microstrategy-buys-more-8773326