- Bitcoin falls below 65k to a 5-week low
- Bet that the Fed will keep rates high for longer hurt sentiment
- Stocks, especially AI stocks, outperform
- Incoming regulation in South Korea spooks the market
- Bitcoin ETFs list on Australia’s ASX
Bitcoin has fallen to a one-month low, dropping below 65,000, amid signs that the long-running digital asset boom, which started in 2023, could be losing momentum.
Bitcoin has fallen for a fifth straight session and is down by over 2% this week, adding to losses of 4% last week. The largest cryptocurrency fell to a weekly low of 64,200 before pairing some of these losses to trade around 64,700 at the time of writing.
Other tokens, such as Ethereum, Solana, and Dogecoin, have also been on the back foot throughout the week. Solana is falling for a fifth straight day, dropping 10% this week, marking a fifth straight weekly decline.
In contrast, stocks and bonds have delivered better returns than Bitcoin this quarter, a stark turnaround from the three months to March, when cryptocurrencies outperformed the more traditional markets by a significant level.
Signs of waning appetite for cryptocurrencies are seen across the crypto market, including with new coins. ZK token, from a highly anticipated project built atop the Ethereum blockchain, fell by a third following its listing this Monday, marking the latest in a string of disappointing launches.
Why is Bitcoin falling?
Maro matters
The crypto market has been under pressure since the Federal Reserve’s interest rate decision earlier in the month. The US central bank left rates on hold and forecast just one interest rate cut this year, down from three predicted in March. This means low levels of liquidity for longer, which bodes poorly for Bitcoin and other cryptocurrencies.
Meanwhile, a rally in AI stocks and record highs reached on the Nasdaq100 and S&P500 could be luring investors away from crypto.
Spooked by South Korean regulation
Separately, in South Korea, reports suggested that new regulation, which is expected to be incoming next month, could make exchanges cut back on the number of tokens available to investors. This will include the review of over 600 cryptocurrencies on domestic exchanges starting next month. This is important because South Korea is an engine of demand for crypto, particularly altcoins. The report could have spooked some traders.
Bitcoin ETFs listed on the primary Aussie stock market
Meanwhile, news that Bitcoin ETFs listed on the primary Australian stock market for the first time yesterday failed to boost the price. The listing has added to a wave of similar launches so far this year in the US and Hong Kong.
VanEck Bitcoin ETF debuted on Thursday on the exchange operated by ASX Limited. Crypto ETFs are already available on CBOE Australia, the country’s other big bourse.
According to Bloomberg Intelligence ETF analysts, there is the potential for Asia Pacific’s virtual asset ETFs to hit more than $3 billion over the coming years, which is expected to be an even split between Australia, Hong Kong, and South Korea once the latter allows crypto funds to be listed.
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