Investing.com– The price of Bitcoin fell on Wednesday, further reversing a rebound seen over the weekend, as lingering fears of increased regulatory scrutiny of the cryptocurrency industry kept traders largely cautious about buying.
Cryptocurrency prices in general have also come under pressure from uncertainty over US interest rates, after several Federal Reserve officials signaled this week that the central bank is more likely to keep rates unchanged in 2024. The site is rebounded from recent losses after their comments.
fell 1.5% over the past 24 hours to $62,523.2 as of 12:44 a.m. ET (0444 GMT). The world’s largest cryptocurrency has remained comfortably within a trading range seen for most of the past two months, as the token’s momentum has faded after hitting an all-time high in March.
Capital flow data released earlier in the week also showed that cryptocurrency investment products, particularly Bitcoin, saw a third consecutive week of strong outflows as enthusiasm for exchange-traded funds faded on the stock exchange launched at the beginning of the year.
Regulatory nervousness keeps cryptocurrency sentiment low
A report published earlier this week showed that more than 90% of stablecoin transactions – which are a major aspect of cryptocurrency trading – were inorganic and not from real users, raising questions about how much retail demand there actually is for cryptocurrencies.
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The report also raised concerns of increased regulatory action against stablecoin operators, particularly , which is the largest of the lot.
As for the actual regulatory action, the trading app Robinhood Markets Inc (NASDAQ:) said it faces potential regulatory action from the Securities and Exchange Commission over the nature of crypto tokens traded on its platforms. The SEC has long argued that crypto tokens are securities, and is currently embroiled in legal battles with issuer XRP and crypto exchange Coinbase (NASDAQ:) over the issue.
The SEC is also reportedly investigating the world’s No. 2 cryptocurrency, Ethereum, because it may be a stock, and this week postponed its decision to approve spot-traded Ethereum ETFs for U.S. markets until July.
But the regulator is expected to reject applications for the ETF.
Cryptocurrency Price Today: Altcoins Drop Amid Interest Rate Uncertainties
Cryptocurrency prices overall fell, also under pressure from the dollar’s recovery, after Federal Reserve officials said the central bank would likely leave interest rates unchanged this year.
fell 1.5% to $3,018.85, while and fell 5% and 3%, respectively.
High US rates for a longer period do not bode well for cryptocurrency markets, as the sector typically benefits from an environment characterized by low rates and high liquidity.
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