Bitcoin, the world’s largest cryptocurrency, experienced a significant intraday decline of 5.60%, dropping to $66,650 today. This downturn reflects diminishing enthusiasm in the crypto market, influenced by growing challenges to achieving looser monetary policy in the US.
The Institute for Supply Management (ISM) reported on Monday that US manufacturing witnessed growth for the first time in 1 1/2 years in March. This growth was fueled by a rebound in production and an uptick in new orders. However, factory employment levels remained subdued, while input prices rose.
The positive ISM data has raised expectations that the US Federal Reserve may abstain from rate cuts in June. Consequently, the yield on the 10-year US Treasury note surged to 4.3% on Monday, its highest level since March 18th.
As a result, bond traders revised their expectations for Fed easing, briefly lowering the likelihood of an initial move in June to below 50%.
Bitcoin’s price drop today marks a 9.6% decline from its mid-March peak of $73,798. Additionally, the cooling of inflows into US spot-Bitcoin exchange-traded funds has weighed on the digital asset. The upcoming halving of new Bitcoin tokens supply, a four-yearly event, is seen by some traders as supportive of Bitcoin’s price.
Bitcoin concluded FY24 with an impressive rally of 150%, surpassing gains seen in Nifty50 and Gold, which registered increases of nearly 30% and 11%, respectively. Starting the fiscal year 2023–24 at around $28,500, Bitcoin surged to $73,750 by March 2024.
Disclaimer: Investors are advised to consult certified experts before making investment decisions.
