Bitcoin plummets 5.50% on fading Fed rate cut expectations, down nearly 10% from peak | Stock Market News (2024)

The price of the world's largest cryptocurrency, Bitcoin, dropped by 5.60% in today's intraday trading to reach $66,650. This decline reflects waning enthusiasm in the crypto market, influenced by the increasing challenges to achieving looser monetary policy in the US.

The Institute for Supply Management (ISM) on Monday reported that US manufacturing experienced growth for the first time in 1 1/2 years in March. This growth was driven by a rebound in production and an increase in new orders. However, employment levels in factories remained low, and input prices rose.

Also Read: Fed need not be in hurry to cut rates, inflation data within expectations: Jerome Powell

This rebound in manufacturing marks the end of 16 consecutive months of contraction.

The positive ISM data has raised expectations that the US Federal Reserve may refrain from cutting rates in June.

Following the robust ISM data, the yield on the 10-year US Treasury note surged to 4.3% on Monday, marking its highest level since reaching an over-three-month high of 4.34% on March 18th.

Also Read: Bitcoin gained 150% in FY24, to remain in positive trajectory in FY25: Experts

Bond traders adjusted their expectations for monetary policy easing by the Federal Reserve for the year, briefly reducing the likelihood of an initial move in June to below 50%.

The drop in Bitcoin's price today represents a 9.6% decline from its peak of $73,798 reached in mid-March.

A flood of inflows into US spot-Bitcoin exchange-traded funds has begun to cool, weighing on the largest digital asset. The supply of new Bitcoin tokens is set to halve this month, a four-yearly event that some traders view as a prop for the original cryptocurrency, as reported by Bloomberg.

Also Read: Bitcoin's surge pushes lenient sentence plea for FTX founder Sam Bankman-Fried

Bitcoin finished FY24 with a remarkable rally of 150%, outpacing Nifty50 and Gold, which saw gains of nearly 30% and 11%, respectively. At the beginning of the fiscal year 2023–24, Bitcoin was valued at approximately $28,500. However, by March 2024, its price had surged dramatically to an impressive $73,750.