"When the Fed cuts rates, it's generally seen as beneficial because rate cuts boost liquidity in markets. Increased liquidity generally prompts investors to allocate more to risk assets. Risk assets include assets like cryptocurrencies and highly volatile stocks (such as AI-adjacent stocks lately). So a Fed rate cut in December would boost liquidity, likely driving investors toward risk assets, including cryptocurrencies such as Bitcoin, which would likely rise in price."
"But now, as NBC News notes, in recent days, traders think there is only around a 50% chance that the Fed will cut rates in December. At the beginning of November, the majority of traders thought there was a 90% chance the Fed would do so. This uncertainty over whether the Fed will cut rates in December is likely one of the biggest factors behind Bitcoin's fall today."
"Investors in Bitcoin are waking up to another bad morning for the world's preeminent cryptocurrency. As of the time of this writing, the price of one token is down 6.55% in the last 24 hours to just above $95,000 per coin. It's a low that Bitcoin has not seen since May. Today's selloff continues a monthlong trend in which Bitcoin has now lost about 20% of its value. But what's driving this most recent selloffs? Two culprits are most likely at play."
Bitcoin fell 6.55% in 24 hours to just above $95,000, its lowest level since May, contributing to about a 20% decline over the past month. Two main factors appear to be driving the selloff: increased uncertainty about a December Federal Reserve interest-rate cut and a broader selloff in volatile tech and crypto-related stocks. Traders' assessed probability of a December rate cut has fallen sharply, reducing expectations for added liquidity that typically supports risk assets. Correlated weakness in AI-adjacent and other tech stocks has amplified losses in Bitcoin.
Read at Fast Company
Unable to calculate read time
Collection
[
|
...
]