According to a report from CoinDesk, on Thursday, the price of Bitcoin fell to around $57,000 per share, hitting a two-month low. This came after the Federal Reserve released the minutes from its June meeting, indicating that the central bank is not yet ready to cut interest rates. Data from cryptocurrency ranking website CoinGecko showed that as of around 2:30 PM London time, the digital currency had fallen by about 5% in the past 24 hours, dropping to $56,837, the first time it has fallen below the $57,000 mark since May 1. Since then, Bitcoin has somewhat reduced its losses, with a trading price of $57,932.57 as of 5:05 PM London time, a 3.4% decrease. Ether, the world’s second-largest cryptocurrency and a competitor to Bitcoin, fell 5% to $3,120.
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Earlier, the Fed released the minutes from its June meeting on Wednesday, which showed that officials were reluctant to lower interest rates until more data showed sustained inflation towards the central bank’s 2% target. Higher interest rates are generally not favorable for Bitcoin and other cryptocurrencies as they dampen investor risk appetite. In March of this year, Bitcoin soared to an all-time high above $73,700 after the US Securities and Exchange Commission approved the first US spot Bitcoin exchange-traded fund (ETF).
ETFs allow investors to purchase products that track the price of Bitcoin without owning the underlying cryptocurrency. Cryptocurrency supporters argue that this helps legitimize the asset class and makes it easier for large institutional investors to participate. However, since then, the trading price of Bitcoin has remained between around $59,000 and $72,000. Recently, the world’s largest cryptocurrency has faced pressure from the news of the collapse of Bitcoin exchange Mt.Gox. Gox is preparing to distribute coins worth around $9 billion to its users, which is expected to lead to some significant selling pressure. However, analysts at crypto data and research firm CCData stated in a research report on Tuesday that Bitcoin has not yet reached the top of its current appreciation cycle and is likely to hit a new all-time high. According to the report, historical market “cycles” suggest that Bitcoin’s so-called “halving” event, which reduces the market’s supply of new Bitcoins, always occurs before price increases and could last for 12 to 18 months, “before a cycle top is formed”.
The last Bitcoin halving occurred on April 19th of this year, so these historical timeframes have not yet passed. CCData stated, “Additionally, we observe that after the halving events in previous cycles, trading activity on centralized exchanges decreased for nearly two months, which seems to be reflecting this cycle. This suggests that the current cycle might further extend into 2025.” Meanwhile, Bitcoin bull Tom Lee said on CNBC’s “Squawk Box” program on Monday that despite the upcoming distribution of tokens to creditors by Mt.Gox, he still expects Bitcoin to reach $150,000. Lee, co-founder and research director at Fundstrat Global Advisors, said in a TV interview, “If I’m investing in crypto and I know one of the biggest overhangs disappears in July, I think that’s a real reason to look forward to a big rebound in the second half.”