Bitcoin briefly dips below $90K, MicroStrategy buys more

Bitcoin (Bitcoin against the dollar) briefly fell below $90,000 early Monday, for the first time since mid-November, before rebounding slightly, after a busy week of trading. We blame this on investors’ anxiety over the recent economic data, which was not even positive Spot Bitcoin ETF Inflows or recent Bitcoin purchases from MicroStrategy may be shaken.

Just last Monday, the cryptocurrency It topped $100,000 Price level, before falling to trade around $95,000 over the weekend. Since then, economic data has emerged Low hopes The lowering of interest rates by the US Federal Reserve has put Bitcoin investors on edge.

Bitcoin Fed Problems

In the past, sentiment about the future of the Fed’s interest rate policy has been a major factor in price movements in both directions Risk Assets such as Bitcoin. This is at least partly due to the increased attractiveness of Treasury yields in a rising interest rate environment. In low interest rate environments, investors tend to move to riskier assets in search of higher returns.

While the Fed has already forecast that it will slow the pace of interest rate cuts this year, recent hotter-than-expected labor market data suggests the Fed is less likely to cut interest rates.

Concerns about government selling of Bitcoin

Adding to these concerns are reports that a federal judge has allowed the US government to sell some of the bitcoins and other cryptocurrencies it seized during enforcement proceedings. The late December ruling caught public attention last week, as investors began to worry that nearly 69,370 bitcoins worth nearly $6.5 billion last week might hit the market soon, sending bitcoin prices plummeting.

It can only be there at all 21 million bitcoins Cryptocurrency price levels are affected by sudden changes in demand and supply. In theory, a sudden influx of bitcoins into the market could cause its price to temporarily drop. However, some experts said these fears may be unfounded.

While Glassnode’s founders recently suggested that the seized coin would likely be auctioned rather than floated on cryptocurrency exchanges, the CEO of analytics firm CryptoQuant said investors should not panic because the amount of Bitcoin in question could be “digested in just one week.”

MicroStrategy continues to buy Bitcoin

Despite the significant fluctuations in Bitcoin prices, MicroStrategy (MSTR) and its CEO Michael Saylor remain undeterred. On Monday, the company announced its 10th consecutive weekly purchase of Bitcoin.

MicroStrategy bought approximately 2,530 bitcoins last week for $243 million. This purchase was funded by selling more company shares bringing the total number of Bitcoins on the books to approximately 450,000. The value of this stock is approximately $41 billion at recent prices.

MicroStrategy shares fell nearly 3% in recent trading.

Bitcoin’s decline has led to a decline in the broader cryptocurrency market

As has been the case in the past, alternative crypto assets have generally performed worse than Bitcoin over the past week, with Ethereum (ETH/USD(down about 18% and Solana)SolUSD) down 19%.

ripple (Ripple Dollar) was a notable exception, rising nearly 1%. Ripple CEO Brad Garlinghouse posted a photo of himself, Ripple Chief Legal Officer Stuart Alderotti, and US President-elect Donald Trump on X last week, which some saw as a potentially positive development for XRP from a regulatory perspective.

Net inflows into spot bitcoin ETFs remained positive for the week after a few days of investors withdrawing money, as the products ended their revenue run. First year of trading. Even this was not enough to support Bitcoin prices.