Crypto washout sends bitcoin below $58,000 ahead of Fed decision

LONDON: Bitcoin slid by almost 6 percent on Wednesday, having posted its worst monthly performance in April since late 2022, as investors pulled money out of cryptocurrencies ahead of an interest rate decision by the Federal Reserve later.

The value of the world’s most traded cryptocurrency fell by nearly 16% in April, as investors booked profits on a sizzling rally that has taken the price to record highs above $70,000.

Bitcoin fell by as much as 5.6% to its lowest since late February. It was last down 4.8% at $57,001, while losses in ether were more modest, down 3.6% at $2,857, also at its weakest since February.

The price of bitcoin is now a full 22% below March’s record of $73,803, technically putting it in a bear market. But it is still up 35% so far this year and double where it was this time last year, thanks in large part to the billions of dollars flowing into newly minted exchange-traded funds since January.

“The recent downtrend can be attributed to increased profit-taking by investors who entered the market during the downturns of 2022 and 2023, as well as ETF investors who witnessed significant price appreciation on their shares after entering the market in the early weeks of 2024,” Fineqia research analyst Matteo Greco said.

Crypto-related stocks fell in US premarket trading. Shares in crypto exchange Coinbase fell 4.6%, while those in miners Riot and Marathon Digital dropped 4.2-4.3%.

On the macro front, the Federal Open Market Committee (FOMC) is not expected to make any changes to interest rates, but the view is taking root among investors that the central bank may not cut rates at all this year, delivering a blow to interest rate-sensitive assets such as cryptocurrencies, emerging market stocks and bonds or even commodities.