Bitcoin Tumbles Below $75,000 as Senate Bill Fails and Fed Raises Interest Rates
Bitcoin prices dropped below $75,000 after a bill failed to pass in the US Senate and the Federal Reserve's decision to raise interest rates for the first time in three years. The largest cryptocurrency fell by 1.2% to $74,985 following the Fed's move.
Crypto-related companies suffered significant losses: Coinbase shares lost about 16%, while Circle shares dropped by around 20% over two days, according to Bloomberg reports.
The Senate's failure to pass the Clarity bill dealt an additional blow to the crypto industry, which had pinned its hopes on this legislation as a foundation for clearer rules to regulate digital assets in the United States. The Fed's rate hike traditionally creates unfavorable conditions for Bitcoin, with only two cases out of ten where the cryptocurrency was trading higher one month later.
The market is facing low liquidity and weakening investor activity, with open interest in Bitcoin futures continuing to decline, according to CoinGlass. A prolonged outflow of funds from cryptocurrency exchanges has also been recorded by Glassnode. The cost of borrowing for the US exceeded 5% for the first time in nearly 20 years, and the dollar strengthened.