Bitcoin (BTC) Price Drops to 2-Month Low After Fed Meeting Minutes Release

The deteriorating macroeconomic climate and the collapse of industry giants such as FTX and Terra have weighed on the price of bitcoin this year.

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The price of Bitcoin fell to around $57,000 apiece on Thursday, hitting a two-month low after the U.S. Federal Reserve released minutes from its June meeting indicating the central bank is not yet ready to cut interest rates.

Around 2:30 p.m. London time, the digital currency fell about 5% in 24 hours to $56,837, dropping below $57,000 for the first time since May 1, according to data from cryptocurrency ranking site CoinGecko. Bitcoin has since pared its losses somewhat and was trading at $57,932.57, down 3.4% as of 5:05 p.m. London time.

Rival token Ether, the world’s second-largest cryptocurrency, was down 5% at $3,120.

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The announcement comes after the Federal Reserve released minutes from its June meeting on Wednesday, which showed officials were reluctant to cut interest rates until more data showed inflation was moving sustainably toward the central bank’s 2% target.

Higher interest rates are generally less favorable to bitcoin and other cryptocurrencies because they reduce investors’ risk appetite.

Bitcoin hit an all-time high of over $73,700 in March this year after the Securities and Exchange Commission approved the first U.S. bitcoin cash exchange-traded fund (ETF).

ETFs allow investors to buy a product that tracks the price of bitcoin without owning the underlying cryptocurrency. Crypto proponents say this has helped legitimize the asset class and made it easier for large institutional investors to get involved.

Since then, bitcoin has been trading in a range of around $59,000 to $72,000.

Recently, the world’s largest cryptocurrency has been under pressure by news of the collapse of bitcoin exchange Mt. Gox, which is preparing to distribute about $9 billion worth of coins to users, which is expected to lead to significant selling.

On Thursday, a small amount of bitcoin was transferred from three wallets previously associated with Mt. Gox, according to Arkham Intelligence. The largest movement involved $24 worth of the cryptocurrency. It was not immediately clear whether this transaction was made as part of Mt. Gox’s repayment plan.

Separately, the German government on Thursday sold about 3,000 bitcoins — worth about $175 million at today’s prices — from a pile of 50,000 bitcoins seized as part of the Movie2k movie piracy operation, according to blockchain analytics firm Arkham Intelligence.

Arkham, which tracks the German government’s Bitcoin wallet, said the assets were transferred to cryptocurrency exchanges Kraken, Bitstamp, and Coinbase, as well as to a separate, unidentified wallet. “These funds are likely being transferred to a depository for an institutional or OTC service,” Arkham said in a post on X.

However, analysts at crypto research and data firm CCData said in a research report on Tuesday that bitcoin has not yet reached the top of its current appreciation cycle and is likely to hit a new all-time high.

According to the report, historical market “cycles” have shown that the so-called bitcoin “halving” event — which reduces the supply of new bitcoins on the market — has always preceded a period of price expansion that can last between 12 and 18 months “before producing a cycle top.”

The last Bitcoin halving took place on April 19 of this year, so those historic deadlines are not over yet.

“Additionally, we observed a decline in trading activity on centralized exchanges for nearly two months after the halving event in previous cycles, which appears to mirror this cycle. This suggests that the current cycle could extend further into 2025,” CCData said.

Meanwhile, bitcoin bull Tom Lee told CNBC’s “Squawk Box” Monday that he still sees bitcoin hitting $150,000 despite the “overhang” from Mt. Gox’s upcoming token disbursement to creditors.

“If I had invested in crypto, knowing that one of the biggest surpluses was going to disappear in July, I would think that’s a reason to expect a pretty sharp rebound in the second half of the year,” Lee, co-founder and head of research at Fundstrat Global Advisors, said in the TV interview.