Bitcoin Prices Drop Below $66,000, Extending Cryptocurrency’s Decline

Graph showing Bitcoin prices dropping below $66,000, indicating a continued decline in cryptocurrency value

Bitcoin’s price fell below $66,000 in Monday morning trading, extending last week’s declines as new U.S. economic data dampened its earlier hot streak. The popular cryptocurrency traded at around $65,600 on Monday, down nearly 2% over the past 24 hours to kick off the week. In the past seven days, Bitcoin has fallen roughly 6%.

Key Takeaways

  • Bitcoin’s price fell below $66,000, extending last week’s declines.
  • The cryptocurrency market has seen a steady decline, with Bitcoin down nearly 2% in the past 24 hours and roughly 6% over the past week.
  • New U.S. economic data, including the Consumer Price Index and Federal Reserve’s interest rate decision, has impacted Bitcoin’s price.
  • Other major cryptocurrencies, including Ether, Solana, Dogecoin, and Cardano, have also seen declines.
  • The global crypto market cap has slipped 1.6% in the last day, bringing its market cap to $2.39 trillion.

Market Reaction to Economic Data

After nearing all-time highs earlier this month when it traded above $71,000, Bitcoin and the broader crypto market have cooled and continued to see steady declines. It fell below $67,000 last week ahead of the latest Consumer Price Index and the Federal Reserve’s interest rate decision, which both landed Wednesday — and briefly dipped below $65,000 over the weekend.

The key inflation measure declined to 3.3% year-over-year. Fed officials voted to keep the benchmark federal funds rate steady between 5.25% and 5.5% and forecasted just one rate cut for 2024. The Dow initially surged more than 350 points and the S&P 500 reached a new record high last Wednesday following the news, but those gains were later erased.

Broader Cryptocurrency Market Impact

The declines have seemingly brought hopes of all-time highs for the largest cryptocurrency to an end, at least for now. Other cryptocurrencies have followed suit, sinking alongside Bitcoin. Ether, the second-largest cryptocurrency by market capitalization, also dipped 1.45% on Monday, hovering around $3,500. Other major blockchains, including Solana, Dogecoin, and Cardano, all fell between 2% and 3% on Tuesday morning, as the crypto market continues its steady decline.

Overall, the global crypto market cap has slipped 1.6% in the last day, bringing its market cap to $2.39 trillion, according to CoinMarketCap.

Cryptocurrency as a U.S. Presidential Election Issue

Former President Donald Trump has shifted his stance on cryptocurrencies during the current election cycle, now actively courting the crypto community to gain an edge over rivals Joe Biden and Robert F. Kennedy Jr. Trump urged cryptocurrency enthusiasts on his Truth Social platform to "vote for Trump," positioning himself as a defender against what he calls "Biden’s hatred of Bitcoin."

On the other side of the aisle, the Biden Administration’s approach to Bitcoin and crypto has come under fire, especially with a recent veto on legislation supporting crypto custody by financial institutions and proposed taxes on Bitcoin mining. Biden is also expected to start accepting campaign contributions via crypto.

Market Outlook

All eyes are on the bitcoin price this week, as digital asset investment products, which include U.S.-based bitcoin ETFs, experienced more than $600 million in outflows amidst bitcoin’s price drop last week, according to CoinShares. Despite the price drop, the notorious bitcoin bulls at MicroStrategy announced another $500 million convertible note offering for the purpose of purchasing more bitcoin before updating the offering to $700 million later in the week.

While bitcoin has traded in a relatively narrow range this month, the crypto asset has been outperformed by several bitcoin mining stocks, as noted by a JPMorgan report. This is thought to be a response to Core Scientific’s deal with CoreWeave related to artificial intelligence.

The SEC’s approval of spot ether ETFs also now appears to be an issue of "when" rather than "if." SEC Chair Gary Gensler indicated in a Senate hearing last week that the matter will be resolved over the summer. Additionally, Bloomberg analyst Eric Balchunas gives a 50-50 chance that the approval will take place by July 2. Prediction market Polymarket puts chances of a spot ether ETF trading by July 4 at 75%.



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