As September draws to a close, Bitcoin, the leading cryptocurrency, is on track to record its first quarterly decline of the year. With a drop of 11% since June, its current value is around $26,970 according to Bloomberg.
This downturn follows a strong 83% increase in the first half of 2023, which served as a recovery from the sharp 64% fall in 2022 amid turmoil in the crypto space. Recent trading has been restricted by global economic uncertainties.
The Federal Reserve’s decision to keep interest rates steady last week suggests a prolonged period of high rates, which can often discourage investments in risky assets. Hosam Mahmoud, a research analyst at CCData, told Bloomberg, “The Federal Reserve’s hawkish stance has heightened investor apprehension, resulting in declines in both traditional and digital asset markets.”
A CoinShares report noted that investors withdrew nearly $500 million from cryptocurrency ventures in the nine weeks ending in mid-September, with Bitcoin accounting for a massive 85% of those withdrawals.
The US Securities and Exchange Commission also recently delayed its ruling on the Bitcoin ETF proposed by BlackRock Inc. This decision followed similar postponements of the Ark 21Shares and GlobalX ETF proposals.
Peter Tchir, head of macro strategy at Brean Capital, said to Bloomberg, “Current investors got very excited about the possibility of a Bitcoin ETF spurring a new wave of demand. A few years ago, it would have helped a lot, as it was difficult to own crypto, but now it just isn’t that hard. It still hasn’t materialized and maybe there is some doubt that it ever will, at least in the near term.”
Despite the prevailing challenges, some Bitcoin supporters expect a potential surge, similar to the rally earlier this year in response to regional banking crises. Will Tamplin, senior analyst at Fairlead Strategies, told Bloomberg, “There are signs Bitcoin’s corrective phase is maturing. It has cleared the 50-day moving average and reflected improved momentum off the back of oversold conditions.”
This content was partially produced with the help of AI tools and reviewed and published by Benzinga editors. Photo: Shutterstock.
