Published: May 9, 2024 14:19
A representation of the cryptocurrency Bitcoin is seen in this illustrated photo taken on March 9, 2024 in Paris, France. (Photo: Reuters)
MUMBAI – Bitcoin prices are falling as part of the digital asset's $500 billion decline, raising questions about whether the cryptocurrency's rally has peaked.
The token has recorded a fifth straight day of declines, the longest decline since October last year. The overall cryptocurrency market fell 17% to $2.4 trillion after Bitcoin hit a record high of $73,798 in mid-March, according to data compiled by CoinGecko and Bloomberg News. became.
Rapid inflows into U.S. spot Bitcoin exchange-traded funds (ETFs), coupled with expectations that Federal Reserve interest rates will rise for an extended period of time, are keeping the digital asset in check. The debut of a Hong Kong crypto ETF last week failed to lighten the mood.
Bitcoin has already reached all-time highs as money flowed into US funds after its launch in January. Net inflows across the group now stand at $11.8 billion, despite outflows of $169 million so far this month.
Benjamin Selemager, a director at digital asset investment management firm Magnet Capital, said many speculators who had bet on the ETF's strong run continuing are now “washed out of the market.” However, he added that the bull market is not over and Bitcoin will reach new highs by the end of 2024.
There are signs in the derivatives market that investors expect Bitcoin to be less volatile compared to the volatility that has clouded the development of U.S. ETFs.
The T3 Bitcoin Volatility Index, which uses option prices to capture the token's expected 30-day movement, and its counterpart for the second-largest digital asset, Ether, are both on track for the first time in about two months. It is at a low level.
As of 7:10 a.m. Thursday in London, Bitcoin was little changed at $61,660, while Ether rose 2% to $3,009.
