The Decrease in Bitcoin Price and Its Implications
On Tuesday, December 24, 2024, at 18:36 WIB, the price of Bitcoin continued to decline for the fourth consecutive day, reaching USD94,248.79 or approximately Rp1.52 billion. This downward trend reflects the weakening after the rally that was previously driven by Donald Trump’s victory in the US presidential election.
Reasons Behind the Bitcoin Price Drop
Bitcoin experienced a 2% decrease from the previous day and even touched levels below USD93,000 on Monday, December 23, 2024. This ongoing downward trend has been observed for six out of the last seven days.
It is worth noting that Bitcoin reached its all-time high at USD108,244.9 in early November. However, the price started to weaken due to macroeconomic pressures, including the interest rate policies announced by the Federal Reserve (The Fed).
Effects on the Crypto Market
The decrease in Bitcoin price was triggered by The Fed’s decision to lower interest rates by 25 basis points, promising only two rate cuts in the coming year. Market expectations were previously anticipating four rate cuts, leading investors to sell speculative assets, including Bitcoin.
The Impact on Related Stocks
Not only Bitcoin, but stocks related to cryptocurrencies also felt the impact. For instance, MicroStrategy Incorporated (NASDAQ:MSTR) plummeted nearly 9% after announcing the sale of 1.3 million shares to purchase an additional 5,262 Bitcoin. Similarly, Coinbase Global Inc (NASDAQ:COIN) and Riot Platforms (NASDAQ:RIOT) dropped by 4% and 3.6%, respectively. On the other hand, some altcoins experienced slight increases.
Continued Market Uncertainty
Despite the minor gains in certain altcoins, the overall market sentiment remains subdued due to uncertainty surrounding US monetary policies.
Conclusion
The recent decline in Bitcoin price and its implications on the cryptocurrency market highlight the volatility and sensitivity of digital assets to macroeconomic factors. As investors navigate through these fluctuations, it is crucial to stay informed and adaptable to changing market conditions.
