Technology
Bitcoin drops below $25,000, Tether’s stablecoin falls under its dollar peg
Standard Chartered predicts that bitcoin could fall to $5,000 in 2023 as part of their research on potential market surprises next year.
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Cryptocurrency prices fell after the Federal Reserve’s June meeting, with bitcoin falling below $25,000 for the first time since March.
On Thursday, bitcoin was lower by around 4% at $24,866.92, according to Coin Metrics, while ether fell more than 5% to $1,632.47.
Altcoins tumbled too. Solana’s token was down 4%, Polygon’s fell 8% and Cardano’s lost 6%.
And selling pressure weighed on Tether (USDT), which lost its peg to the U.S. dollar on most exchanges Thursday, falling to 99 cents in its biggest drop since November.
The slide began late Wednesday, after the Federal Reserve concluded its June meeting and decided to leave interest rates unchanged for now but said there are two more in sight later this year. Stocks were under pressure as news broke, but cryptocurrency prices remained flat until after the close.
“This has little to do with the FOMC, and more to do with thinner liquidity and weak sentiment,” said Michael Safai, managing partner at Dexterity Capital. “Given how thin trading volumes are at the moment, a sizable (but not massive) sell order is enough to set off liquidations.”
“Traders are more inclined to keep their money off the table in the midst of this regulatory backlash, especially when it comes to altcoins, so there isn’t going to be much new capital flowing in to buoy prices so readily,” he added.
Bitcoin (BTC) was flat this week before dropping after the stock market close Wednesday.
Price action has been tepid this week while sentiment has been negative after the Securities and Exchange Commission put a bigger chill on the industry when it sued Coinbase and Binance and called into question the regulatory status of several popular coins they deemed “crypto asset securities.” That was just the latest development in an ongoing crackdown by regulators that’s weighed on the industry since the start of the year.
“Further confusion about the legality of popular altcoins is keeping capital on the sidelines, and it’ll take a long run of good news or no news to get traders feeling excited about a recovery,” Safai said. “Bitcoin prices will stay relatively rangebound between $25,000 and $27,000 until the next set of regulatory headlines tell us whether we’re heading towards resolution or even more obfuscation.”