Bitcoin Falls Below $100,000 as Interest Rate Expectations Lowered for December
The value of the cryptocurrency Bitcoin fell 4.2% to $97,795.50 on Friday, its lowest level in six months, amid a broader sell-off in risk assets as bets on a December interest rate cut by the Federal Reserve diminished due to uncertainty.
Investing.com, a cryptocurrency analytics platform, noted that Bitcoin, the world's largest cryptocurrency, is also on track for its third consecutive week of losses, as institutional flows into digital assets have dried up.
The nearly 43-day US government shutdown, which ended Wednesday, was a major factor in the uncertainty, with government officials indicating that October's employment and inflation data might not be released due to the shutdown.
This situation leaves the Federal Reserve in a state of what has been described as "economic blindness" ahead of its December meeting, making it likely to keep interest rates unchanged in anticipation of economic conditions. Markets are currently pricing in a 45.4% probability of a 25-basis-point rate cut at the Fed's next meeting, down from 63.8% last week.
The absence of official inflation and jobs data has also increased uncertainty surrounding the US economy, dampening risk appetite and prompting traders to move away from speculative assets such as cryptocurrencies. Bitcoin fell by more than 4% this week, heading for its third consecutive week in negative territory.
The losses were driven by a slowdown in institutional buying—by companies and Bitcoin-linked exchange-traded funds (ETFs), with outflows reaching nearly $897 million yesterday, marking the third consecutive week of declines.
The decline in institutional demand is seen as a consequence of Bitcoin trading within a narrow range for most of October and early November.
As for other cryptocurrency prices, they declined broadly, following Bitcoin's slide. Markets found insufficient support amid the continued weakness that persisted throughout October and into early November, and most altcoins were also on track to record weekly losses.
Ether, the world's second-largest cryptocurrency, fell 9.3% to $3,161.68, down more than 7% this week. BNB dropped 5.4%, also down about 7% this week, while XRP fell 8%.
Solana and Cardano lost between 8.5% and 9%. Among the meme coins, Dogecoin and Trump coin each fell by more than 7%.