- Bitcoin’s value fell over 6% on Wednesday, ending its worst month since late 2022, owing to investor withdrawals ahead of a key Federal Reserve decision.
- Significant withdrawals were made from U.S. Bitcoin ETFs; Grayscale’s GBTC lost $454 million amid a wider decline in associated stocks and cryptocurrency markets.
Wednesday saw a sharp decline in Bitcoin, continuing its worst monthly performance since late 2022, as the cryptocurrency community prepared for the imminent Federal Reserve interest rate announcement.
The top digital currency in the world fell 7.48% in the last day, trading at roughly $57,405.43, according to CoinMarketCap data.
Bitcoin Drops Due to Concerns About Rates
After hitting a record high in March with prices surging beyond $70,000, April saw an almost 16% decline in the value of Bitcoin. With Bitcoin’s value currently lying a full 22% below its top of $73,803 in March, this decline marks a dramatic reversal from the thrilling highs.
The cryptocurrency is now officially in a bear market, despite the fact that it is still up 35% year to date and has significantly doubled in value from this time last year.
Significant capital flight from the cryptocurrency markets is correlated with the decline in Bitcoin’s value, especially before the Federal Reserve announces its interest rate decision.
Fearing a possibly stagnant rate environment, investors have begun to retreat, which has affected not only Bitcoin but also other cryptocurrencies like Ether, which fell to $2,857, its lowest level since February.
The significant withdrawals from US Bitcoin ETFs in recent weeks have made the issues worse, in line with what ETHNews previously disclosed. Notably, Grayscale’s GBTC has lost $454 million, indicating a rising lack of confidence among investors.
Cryptocurrency-Related Stocks are Affected
The wider market decline in U.S. premarket trading has also harmed cryptocurrency-related stocks. According to a Reuters report, shares of major crypto exchange Coinbase fell by 4.6%, while crypto miners Riot and Marathon Digital saw their shares decline by around 4.2-4.3%.
Regarding the overall state of the economy, investors are increasingly in agreement that the Federal Open Market Committee (FOMC) will not lower interest rates this year, and the FOMC is projected to keep them at their current levels.