Bitcoin price continuously plummeted and lost the $57,000 mark. Monetary policy in the US continues to be tightened and the founder of Binance was convicted, negatively impacting the flow of risky investment capital.
Theo Coin Market Capbitcoin price continuously adjusted sharply, at one point falling below the 57,000 USD/BTC mark.
By the end of April, the world’s largest digital currency had dropped about 15%, the worst drop since November 2022 when the FTX exchange collapsed, and was trading at its lowest level since late February.
The reason is partly due to the excitement surrounding spot ETFs in the US market with virtual assets decreasing. However, the price of the world’s largest virtual currency is still expected to increase by more than 30% in 2024.
Bitcoin’s plunge also caused 100,450 derivatives accounts to be liquidated with a total loss value of up to 365 million USD.
Spot ETF fever took bitcoin to a record high of nearly $74,000 in March. But waning expectations of Fed interest rate cuts have caused capital flows into investment products to drop significantly. tell.
The Fed decided to keep interest rates unchanged after its meeting in early May. Since July last year, US operating interest rates have always been in the range of 5.25-5.5%.
Bitcoin dropped sharply in the past month (Photo: Coin Market Cap).
“The macro backdrop is not favorable for liquid assets such as cryptocurrencies. Tough regulatory policies have tightened liquidity since mid-April,” said Geoff Kendrick, head of research. Research digital assets of Standard Chartered Bank, shared with CNBC.
Sharing the same view, Zach Pandl, head of research at digital assets firm Grayscale Investments, said higher real interest rates have supported the USD and put pressure on bitcoin over the past month.
“The FOMC statement expressed concerns about inflation but did not rule out interest rate cuts. Expectations of future interest rate cuts will continue to support bitcoin prices and cryptocurrency markets,” the expert said. This expert commented.
Bitcoin is trading in a narrow range as the main catalysts for the recent price rally weaken. Besides, money flow also continuously flowed out of US bitcoin ETFs for 5 consecutive days.
As of April 29, about 182 million USD had flowed out of 11 spot ETF funds in the US. Meanwhile, in previous months, ETF funds received capital inflows worth billions of dollars, the highest peak being in February with 6 billion USD.
Meanwhile, the launch of spot bitcoin ETFs in the Hong Kong market this week did not bring too much momentum to the digital currency.
In addition, bitcoin’s correction also took place right after the former CEO of Binance, Changpeng Zhao, was sentenced to 4 months in prison for money laundering, much lower than the previously proposed 3 years in prison.
Zhao agreed to pay a $50 million fine, a very small amount compared to the estimated $33 billion he earned from Binance. He also agreed not to appeal any sentence of up to 18 months.
