© Reuters
Investing.com– fell sharply to a more than seven-week low and also broke below key levels on Tuesday, as initial momentum from the approval of several spot exchange-traded funds now appeared to be waning.
Bitcoin fell 4.3% to $39,867.0 at 19:54 ET (00:54 GMT).
The world's largest cryptocurrency has seen a sharp rally over the past year amid speculation that the Securities and Exchange Commission (SEC) would approve ETFs that directly track the price of the token, a first for US markets. The token hit a nearly two-year high earlier this month, just as the SEC approved spot ETFs.
But bitcoin's performance since its approval has been largely disappointing, defying forecasts that the price would soar with the influx of more institutional capital.
All of the spot ETFs that were approved and listed earlier this month, including BlackRock's iShares Bitcoin Trust (NASDAQ 🙂, NYSE 🙂, ARK 21Shares Bitcoin (NYSE 🙂), and WisdomTree Bitcoin (NYSE 🙂), were trading down by 13 % and 14%.% since their debut The ETFs had a good first day of trading, but have so far fallen almost steadily in their price performance and trading volumes.
Bitcoin came under pressure from the resilience of the , amid rising expectations that the Federal Reserve will do so. Traders were seen sharply reducing their bets this week that the Federal Reserve will begin cutting rates as early as March 2024.
Bets on a rate cut in March had also boosted bitcoin's gains over the past two months. But the token, which offers no yield, typically performs moderately in a high-rate environment.
While the SEC's approval of spot ETFs offered some regulatory credibility to the industry, SEC Chairman Gary Gensler maintained his stance that crypto assets were “exceptionally risky” investments.
The crypto industry is still battling a massive loss of faith, following several high-profile bankruptcies and regulatory crackdowns over the past two years. The SEC has ongoing cases against major exchanges Coinbase (NASDAQ 🙂 and Binance, the latter of which also received billions of dollars in fines in late 2023 on criminal charges brought by the Department of Justice.
Bitcoin's recent slowdown largely contrasted with a strong rally in traditional financial markets, particularly US stocks. The and the closed at all-time highs on Monday, driven primarily by a plunge in technology stocks ahead of several major earnings releases this week.
Upgrade your investing with our innovative AI-powered InvestingPro+ stock picks. Use coupon INVPRO2024 to take advantage of a limited-time discount on our Pro and Pro+ subscription plans. Click here to learn more and don't forget to use the discount code at checkout.
