Bitcoin Plunges Below $63,500 Amid AI Tech Rout and Fed Rate Hike Fears
Bitcoin (BTC) plummeted to $63,494 on Tuesday, marking its lowest price in over a week and a half. The decline coincided with widespread selling pressure across AI-focused technology equities, which spread contagion into digital asset markets.
The KOSPI benchmark in South Korea experienced a dramatic plunge exceeding 10% as market participants liquidated positions in semiconductor companies focused on AI chip production. This selling momentum extended into Bitcoin and alternative cryptocurrencies, with Ethereum experiencing approximately 4.43% losses, Solana declining 4.41%, while XRP registered a 4.89% decrease during the same timeframe.
Market participants are assigning a 38% probability to an unexpected Federal Reserve rate increase this week, while September hike likelihood exceeds 80%. Elevated interest rates generally diminish the attractiveness of non-yielding assets such as Bitcoin.