On April 2, Bitcoin price fell once again, driven by cooling demand for US-based exchange-traded funds (ETFs) and a reduced appetite for betting on monetary easing by the Federal Reserve. Subdued Demand Cooling demand for US-based ETFs is a major factor behind Bitcoin's price decline
On April 2, Bitcoin price fell once again, driven by cooling demand for US-based exchange-traded funds (ETFs) and a reduced appetite for betting on monetary easing by the Federal Reserve.
Subdued Demand
Cooling demand for US-based ETFs is a major factor behind Bitcoin's price decline. These ETFs would provide investors with an easier way to invest in Bitcoin on traditional exchanges. However, the US Securities and Exchange Commission (SEC) has delayed its decision on several ETF applications, leading to uncertainty in the industry.
Shift in Monetary Policy
Reduced appetite for betting on monetary easing by the Federal Reserve is another factor contributing to Bitcoin's price decline. Amid persistent inflationary pressures, the Fed has signaled that it may raise interest rates sooner than expected. This has led to higher US Treasury yields and a stronger US dollar, which tends to make risk assets, including Bitcoin, less appealing.
Market Reaction
With these headwinds coming together, the crypto market has seen a "soft" performance over the past 12 hours, as observed by Richard Galvin, a co-founder of DACM. Bitcoin's price has dipped below $45,000, while other cryptocurrencies have also faced similar declines.
Industry Insight
Cryptocurrency analyst Katie Stokes suggests that Bitcoin's decline is a sign that the market is adjusting its expectations for Fed policy. She believes that if the Fed adopts a more hawkish stance, Bitcoin could decline further.
Bitcoin's latest price decline reflects the cooling demand for US ETFs and a shift in Fed policy expectations. If the Fed takes a tighter stance, the crypto market could face further challenges. However, over the long term, demand for Bitcoin and other cryptocurrencies is expected to continue growing as investors seek diversification and inflation hedges.
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