(MENAFN) The cryptocurrency market experienced a notable downturn yesterday, attributed in part to anticipation surrounding the upcoming Federal Reserve meeting. Speculation about the Fed potentially signaling higher interest rates for an extended period left some investors cautious. Bitcoin, the leading digital asset, saw a dip to its lowest level in a week, momentarily hitting a point of concern before recovering slightly. By noon Singapore time, it was trading nearly 2 percent lower at USD62,505.
The decline wasn't limited to Bitcoin alone; smaller cryptocurrencies like Ethereum, BNP, and XRP also faced losses. Adding to the market's unease, the Depository Trust Company, a key player in settlement and clearing services in the U.S., announced on Friday that exchange-traded funds (ETFs) tied to cryptocurrencies would not receive collateral value for credit line facilities. This move raised concerns about potential impacts on digital asset markets, further contributing to the apprehension among investors.
Moreover, the demand for Bitcoin exchange-traded funds in the United States has been dwindling. This decline in demand coincides with Bitcoin's overall performance for the year 2024, which has weakened to about 47 percent. This drop contrasts sharply with the situation in mid-March when Bitcoin surged to a record level of nearly USD74,000, boasting a progress rate of over 70 percent at the time. The shifting landscape of regulations, coupled with market sentiment influenced by central bank policies, underscores the volatility and uncertainty inherent in the cryptocurrency market. Investors are now closely watching developments in both regulatory frameworks and macroeconomic factors for indications of future market trends.
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