Bitcoin crashed to its lowest level in six months on Friday, as a broad sell-off in risk assets deepened amid fading hopes that the Federal Reserve will cut U.S. interest rates at its upcoming policy meeting.
Markets now price in about a 40% chance of a December rate cut, down from about 90% earlier this month and just over 60% earlier this week.
In early afternoon trading, bitcoin, the world’s largest cryptocurrency, was last down 2.3% at $96,564, having earlier dropped to $95,885.33, its lowest since May 7.
Ether, the second-largest cryptocurrency, was last flat on the day at $3,175.22, after dropping to a 10-day low.
Selling in U.S. equities, however, eased slightly in the afternoon ahead of the weekend, but investors stayed on edge as they braced for a slew of economic data next week following the government’s reopening after a record 43-day shutdown, Reuters reports.
Risky assets overall have come under pressure in recent days as expectations of a rate cut from the Fed next month have shrunk as a growing number of policymakers signaled an inclination to hold off on easing.
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Since peaking on October 7, the crypto market capitalisation has fallen by more than $1 trillion, or 24%.
The backdrop for bitcoin remains bearish, analysts said.
Investors in recent days have worried the Federal Reserve may hold off on a December rate cut, and that A.I.-related stocks have become too pricey.
Long-term bitcoin holders have accelerated profit-taking, according to crypto research firm Glassnode. Those long-term bitcoin holders have sold 815,000 bitcoin over the past 30 days, a record high since January 2024, according to CryptoQuant, another digital asset research firm.
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