Bitcoin Price Just Dropped Below $40K To Its Lowest Since Mid-March

Bitcoin prices have been dropping recently, dropping below $40K this afternoon at a time when traders are keeping a close eye on a very uncertain geopolitical landscape.

The world’s most popular cryptocurrency has fallen below the $40,000 mark multiple times today, hitting at least $39.524.20 around 4 p.m. ET, according to CoinDesk figures. This happened with many cryptocurrencies experiencing declines.

Since hitting an intraday low, Bitcoin has bounced back, recovering modestly to trade near $39,725 at the time of writing, additional CoinDesk data revealed.

[Ed note: Investing in cryptocoins or tokens is highly speculative and the market is largely unregulated. Anyone considering it should be prepared to lose their entire investment.]

Economic concerns

The cryptocurrency has faced these volatility at a time when many investors and consumers are concerned about the price hike. Conventional measures of inflation have reached multi-decade highs in both the United States and the United Kingdom

Moreover, various parties have floating estimates that the March numbers for this measure of price hikes will reach an annual rate of 7.5% in the eurozone and 8.5% in the US.

Moreover, there are concerns about slowing economic growth in the US, with think tank The Conference Board recently forecasting that inflation-adjusted GDP will increase at an annual rate of 1.7% during the first quarter, down sharply from 7% during the previous quarter.

These common challenges of high inflation and a lackluster growth outlook materialize at a time when federal policy makers expect to continue to tighten monetary stimulus, a development that could provide headwinds to economic conditions and global asset prices.

Several analysts have focused on these developments, including Martha Reyes, Head of Research at Digital Asset Brokerage and Pequant Exchange.

“Digital assets have fallen as we hit peak inflation and interest rate hike concerns while growth is expected to slow,” she said.

“Inflation data will be released this week but this is a lagging indicator and not a leading indicator,” Reyes confirmed.

“Our main concern at this point is growth that will continue to hurt risk assets.”

Fed

Charlie Silver, CEO and Chairman of Permission.io, offered a different view of Reyes, choosing to focus on the US central bank.

“The US Federal Reserve has made it clear that it thinks risky assets should go down, and has shouted from the rooftops that interest rates are going up too much, which is bad for prices.”

Internet and technology lawyer Andrew Russo emphasized the major influence this financial institution has on the price of digital assets.

“I think the current behavior of the Federal Reserve is a major factor at play here,” he said.

Earlier this week, the Fed announced that it would cut the central bank’s balance sheet by nearly “trillions of dollars” in bond holdings. $95 billion per month – this is a very sharp reduction in the balance in the attempts of the central bank to tighten its monetary policy as inflation rises.”

Continuing adoption

Reyes emphasized that regardless of the macroeconomic challenges, the adoption of cryptocurrencies continues, and several developments can help accelerate this increase in use.

“Cryptocurrency is steadily developing as evidenced by the integration of payments on a larger scale,” she stated. Furthermore, Reyes noted, “regulation remains an incentive, particularly the approval of the ETF in the United States.”

Finally, she predicted that “if inflation continues, developing countries will embrace cryptocurrency more.”

Disclosure: I have some bitcoin, bitcoin cash, litecoin, ether, EOS, and sol.

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