Bitcoin fell to its lowest level since October 2024 on Wednesday amid a pullback in tech stocks and an ongoing cryptocurrency bear market. Bitcoin price fell more than 4% to $59,548.19. Earlier, its lowest hit $59,023.98, the lowest since October 10, 2024.
This is the third time this year that Bitcoin has fallen below the $60,000 mark.
The flagship cryptocurrency, currently in its roughly eighth month of a bear market, is being squeezed by both macroeconomic and industry-specific headwinds. Market capital is turning to artificial intelligence (AI) stocks, popular initial public offerings (IPOs) and prediction markets. At the same time, inflationary pressures triggered by the Iran war have kept the Fed’s focus on fighting inflation, which has created a grim macro backdrop for Bitcoin. Additionally, a widespread loss of confidence across the crypto market has led investors to question Bitcoin’s unique value proposition.
The main upside catalyst for the entire crypto industry is the market structure bill known as the CLARITY Act. The bill has about five weeks to clear key legislative hurdles before Congress resumes its summer recess. If this window is missed, the bill could be delayed until the fall.
Despite the weak market sentiment, Bitcoin's decline was much more modest than the devastating slumps seen in previous crypto winters. Sam Callahan, director of Bitcoin strategy and research at Bitcoin fund management company OranjeBTC, said that an important reason behind this is the increase in institutional participation.
"People often say this is the 'worst bull market, the best bear market,'" said Sam Callahan, director of Bitcoin strategy and research at OranjeBTC. "What this is really saying is that Bitcoin is less volatile than previous bear markets due to changes in the investor base: the investor base is larger and more liquid now, and it is no longer an asset held primarily by retail investors. It is now more institutionalized, so you will see less volatility on both the up and down sides."
Bitcoin ETFs have seen outflows of $182 million so far this week and are on track to post a seventh consecutive week of net outflows. Total assets held by Bitcoin ETFs have fallen to $77.5 billion from about $113 billion last year.