The most famous cryptocurrency is in the doldrums. Its price has suffered a devaluation of 16% in the month of April, plus another 2% so far in May. Almost a fifth of its value has vanished in just a few sessions, marking the biggest monthly decline since Sam Bankman-Fried’s FTX crypto empire imploded in November 2022.
Under the perspective of the impact of the halving, that is, the announced cut in the remuneration that miners receive to extract the cryptocurrency using a computer program (which in theory should increase its scarcity and, therefore, its value), bitcoin reached an all-time high of nearly $74,000 in mid-March, also driven by a flood of inflows into spot bitcoin exchange-traded funds from companies like BlackRock and Fidelity.
However, true to its volatility, the cryptocurrency has returned to below $60,000. Analysts highlight that the delay in lowering interest rates by central banks means that there are still profitable assets and alternatives to bitcoin in the market. “Interest rates in the United States remain high, which is likely to affect confidence in risk assets,” comment analysts at Julius Baer.
As a consequence, bitcoin exchange-traded funds in the United States suffered a withdrawal of 564 million by investors on Wednesday, the largest reduction since the debut of this type of product in January. A trend that has not managed to stop the launch this week of a bitcoin and ether ETF in Hong Kong.