June 22, 2024

Image for article titled Bitcoin has dropped all the way to $57,000 and is now in a bear market

Illustration: Dado Ruvic (Reuters)

Bitcoin has continued its April wipeout into May, falling almost all the way to $57,000 on Wednesday morning and technically entering into a bear market after its worst month in almost a year-and-a-half.

The ongoing selloff, which had Bitcoin’s price sitting at $57,075 early Wednesday morning, follow’s April’s closely watched “halving” event and comes ahead of Wednesday’s Federal Reserve decision on interest rates. Bitcoin is now more than 20% below its record high of $73,803 set in March, though it’s still up about 30% so far this year.

Bitcoin’s previous halving events, in which the reward for miners who create more Bitcoin is cut in half, has typically been followed by big rallies in the cryptocurrency’s price. But analysts had warned that might not be the case this time.

Bitcoin continued to shed its value Tuesday as Hong Kong’s Bitcoin and Ether ETFs failed to impress investors on their debut. Recently, six crypto-related ETFs were listed on the Hong Kong exchange. Bitcoin ETFs contributed $8.5 million in volume, while Ether ETFs brought in $2.5 million. As a comparison, the issuers anticipated an initial volume of $100 million, as per media reports.

Bitcoin ETFs in the U.S. are struggling, too, with a total net inflow of $11 billion — which could have been much better if Grayscale’s GBTC had seen any inflows. According to investment firm Farside, GBTC has experienced outflows for over a month, totaling $17 billion since April 11. Over the past three days, Fidelity’s FBTC also has witnessed continuous outflows totaling $31 million.

The current price drop follows a period of stability during which Bitcoin performed well after going through its “halving” process. The recent drop in cryptocurrency prices is due to investor jitters as the Federal Reserve reveals it has no plans to cut interest rates soon, and fears of stagflation are on the rise.

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