Bitcoin dropped below $70,000 on Friday, hitting a near three-month low as investor sentiment toward cryptocurrencies soured. The world’s largest crypto fell 6.3% to $69,101.1 by 22:40 ET (03:40 GMT), marking its first dip below the $70,000 threshold since mid-August. The decline extended a period of underperformance for Bitcoin, driven by mounting headwinds in the crypto market.
The primary pressure came from growing expectations of further interest rate hikes by the Federal Reserve. Markets increasingly anticipate a rate increase as soon as December, with consumer inflation data for October exceeding expectations. Higher interest rates typically weigh on speculative assets like crypto by reducing liquidity and shifting capital toward safer investments, such as government debt. Historically, Bitcoin has struggled in high-rate environments.
Regulatory concerns also contributed to the downturn, as the Democratic party’s victory in both chambers of Congress raised the likelihood of stricter anti-money laundering and risk management rules for the crypto industry. Additionally, Strategy, the world’s biggest Bitcoin treasury, faced new challenges after MSCI announced its exclusion from benchmark indexes effective November 30. This move limits Strategy’s ability to raise new capital, potentially forcing it to sell more of its Bitcoin holdings to meet financial obligations.