Key Takeaways:
The cryptocurrency market has officially entered a bear market as Bitcoin (BTC), the world’s largest digital currency by market capitalization, suffered a steep decline to trade below the $60,000 marker for the first time since January.
BTC hit a yearly low of $59,100 during the afternoon trading hours on May 1st, its weakest price since late February, and is down over 5% in the past 24 hours. The leading cryptocurrency’s value has fallen 17% over the last 30 days, and 12% in just seven days.
The value of the overall cryptocurrency market also fell by over 4% in the last 24 hours, with major altcoins like Ether (ETH), and Solana (SOL) posting 7%-8% losses. The board market CoinDesk 20 Index declined 6% during the same period.
Hong Kong-listed Bitcoin ETFs Fail to Garner Hype, Posting $10 Million Trading Volume on Debut
Bitcoin’s tumble can be attributed to the poor debut of the spot BTC exchange-traded funds (ETFs) in Hong Kong and the US Federal Reserve’s decision to leave interest rates on the dollar unchanged, giving traders plentiful reasons to sell.
On the first day of trading for the Bitcoin and Ether spot ETFs listed on Hong Kong exchanges, they failed to capture the market after posting just over $10 million in trading volume. For comparison, the Bitcoin spot ETFs listed on US exchanges amassed over $4 billion in trading volume on day one.
However, as Bloomberg ETF analyst Eric Balchunas pointed out, the debut was successful considering the fact that the Hong Kong ETF market is only a fraction of the size of the US market.
China Asset Management’s (AMC) Bitcoin ETF lead the charts by gathering over $123 million worth of funds in its first trading session, making it the sixth-best ETF launch over the past three years. The fund has already found its place among the top 20% of the largest ETFs in the world.
Balchunas also highlighted that the launch of Bitcoin ETFs in Hong Kong comes at a good time for the crypto market as they could help offset some of the outflows that have slowed down US-based products.
Higher-for-Longer Inflation Projection Force US Fed to Leave Dollar Interest Rates Unchanged
The traditional financial markets also struggled alongside the crypto market following reports that the latest US economic data revealed slowing growth and speedier price pressure, indicating a stagflation. The Nasdaq lost 2% of its value, while the S&P 500 fell 1.6% yesterday.
In a report published on Tuesday, Joel Kruger, market strategist at London-based fintech LMAX Group, said that recent reports showing weaker US economic data and hotter inflation have significantly tampered with the Federal Reserve’s plans to slash interest rates on the dollar, putting a heavy weight on the shoulders of the digital asset market.
He said there is more evidence of the Fed needing to prepare for a higher-for-longer inflationary outlook, and with the US dollar “coming back into favor across the board”, this is affecting cryptocurrencies as well.
Crypto Market Suffers Biggest Monthly Loss Since FTX Collapse in November 2022
Tuesday’s market-wide decline has snapped the Bitcoin and broader crypto market’s seven-month winning streak, resulting in effectively its worst monthly loss since November 2022, when cryptocurrency exchange FTX collapsed.
BTC and ETH are down over 16% and 18% through April. Meanwhile, it was the cryptocurrencies below the market leaders, such as Solana (SOL), Dogecoin (DOGE), and Avalanche (AVAX), which suffered the most as they posted losses of between 35% and 40% last month.
As per data from TradingView, the overall cryptocurrency market has shed 18% of its value, its biggest decline since June 2022, which was the initial stage of the ‘Crypto Winter’.
At the time of writing, Bitcoin (BTC) is trading at 57,396 – down 4.4% in the last 24 hours.
More News: Bitcoin Slips To $62,000, Causing Widespread Market Decline
