Monday saw a decline in both Bitcoin and the whole cryptocurrency market as traders and investors got ready for a significant Federal Reserve meeting later this week.
Market players braced themselves for potential implications on digital assets as anticipation mounted around the meeting’s possible hint of higher-for-longer interest rates.
Early on Monday, Bitcoin hit a one-week low of $61,928. After a small recovery, it was down around 2% at $62,387 at the time of publication.
About a dozen U.S. spot Bitcoin ETFs are still in moderate demand. After hitting a record high of around $74,000 in mid-March, Bitcoin’s 2024 gain dropped to over 47% from over 70%.
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On May 1 of this week, the Federal Reserve is anticipated to make an interest rate announcement, with a 95.6% probability of keeping rates unchanged. The US will also make available its April unemployment rate on May 3. Similarly, there is now less hope for a U.S. interest rate decrease this year.
Conjecture before the Federal Reserve gathering has stimulated discourse among industry players about the prospective course of interest rates and its consequences for digital assets. Increased interest rates are seen to be detrimental to risky assets like Bitcoin.
Investors will be intently watching events and interpreting remarks for hints about the Federal Reserve’s intentions as it gets ready to meet and discuss its view for interest rates and monetary policy. The digital asset markets may become even more unstable if there are indications of a more hawkish approach to interest rates, while investors looking for stability may find some solace in a more dovish tone.
Expectations remain on BTC price post-halving
This month saw the fourth Bitcoin halving, which reduced supply inflation by 50% and increased issuance scarcity. It goes without saying that the halving, a significant and well reported event, increases conversation regarding how it affects Bitcoin’s price movement.
Ninety-seven percent of the 21 million bitcoins that are in circulation have been mined and issued, totaling 19.68 million bitcoins. For the next 126 years, around 1.312 million Bitcoin will be distributed. Between the fourth and fifth halvings, 50% of the 1.312 million BTC remaining in supply will be mined.
