Bitcoin fell as positive labor market numbers dampened hopes for an interest rate cut
Key takeaways
- Bitcoin fell on Tuesday as labor market data underscored the strength of the US economy, dampening hopes that the Federal Reserve would cut interest rates.
- Riskier assets like Bitcoin tend to fall in response to news that interest rate cuts are less likely.
- Bitcoin fell to around $97,000 from an overnight high near $103,000. The digital currency rose above $100,000 on Monday for the first time in nearly three weeks.
- Shares of cryptocurrency-focused companies, including MicroStrategy, Coinbase Global and Marathon Holdings, also fell on Tuesday.
Bitcoin (Bitcoin against the dollar) fell on Tuesday after doing better than expected Labor market data The strength of the US economy was highlighted, and hopes that the Federal Reserve would lower interest rates diminished.
Bitcoin was trading at $97,000 late Tuesday afternoon, down from an overnight high of roughly $103,000. It was digital currency It moved above $100,000 Monday for the first time in nearly three weeks.
Risk assetslike Bitcoin and other crypto assets, tend to decline in less favorable conditions Low interest ratesBecause it means there will be less money to spend on such assets, and bond yields will be more attractive. The Fed has cut its benchmark interest rate at each of its last three policy meetings — the first cuts in four years — but warned that the pace of easing is likely to slow as inflationary pressures persist.
Bitcoin Opportunity Fund co-founder and managing partner James Lavish said in a post on
Non-Bitcoin crypto assets fell more than Bitcoin on Tuesday, with Ethereum down 8% and Solana down over 7% over the past 24 hours at the time of writing. According to Farside Investors, inflows into bitcoin exchange-traded funds (ETFs) approached $1 billion on Monday, as portended by the accompanying price rally. Ethereum ETFs also saw inflows of $128.7 million.
Regarding cryptocurrency-related stocks, Bitcoin treasury company MicroStrategy (MSTR) fell 10% on Tuesday and cryptocurrency exchange giant Coinbase Global (currency) Decreased 8%. Shares of Bitcoin mining company Marathon Holdings (Mara) slid 7%.
https://www.investopedia.com/thmb/zgjRJ5Joirye-VvUCxCU3l6GP6o=/1500×0/filters:no_upscale():max_bytes(150000):strip_icc()/GettyImages-2070086171-083d1a9e4d464f658ed24e91017aa2fc.jpg
2025-01-08 02:00:00
