Bitcoin dips below $30,000 as investors skittish on Fed

Bitcoin dips below $30,000 as investors skittish on Fed

Bitcoin fell below US$30,000 on Tuesday, hitting a 10-month low amid heavy market sell-offs on concerns over the Federal Reserve's aggressive monetary tightening and recession fears.

The last time the largest cryptocurrency by market cap traded under $30,000 was July 20, 2021, when it hit $29,301 before rebounding.

According to Coingecko.com, the cryptocurrency market cap dropped to around $1.49 trillion as of 9.33 am yesterday, down 10.1% in 24 hours. At that time, Bitcoin was moving around $30,000, down 7.6% in 24 hours before rebounding to $31,000.

On May 9, the Dow Jones Index was down 653.67 points or 1.99% to 32,245.70 points, the S&P 500 was down 132.10 points, or 3.20% to 3,991.24 points, hitting a 52-week low, and the Nasdaq was down 521.41 points, or 4.29% to close at 11,623.25 points.

The SET Index fell to 1,592.64 points before rebounding to end a volatile day at 1,622.78, up 1.14% in trade worth 83.1 billion baht.

Zipmex chief executive Akalarp Yimwilai said cryptocurrency prices decline as investors move from high-risk assets to the US dollar because they expect the Fed's aggressive rate hikes and monetary policy tightening will lead to liquidity loss in the market.

In line with cryptocurrencies, prices of technology stocks, growth stocks, and US traditional stocks have also dropped on negative sentiment from the rate hikes.

He recommends investors gradually invest via dollar cost averaging or store their money in decentralised finance during heavy market volatility, as Bitcoin can fall to $25,000 if negative macro economic factors add up.

However, Mr Akalarp said investors can also choose to accumulate Bitcoin because the current price is low. They can expect profits in the long term because they can sell when the price rebounds, he said.

Mr Akalarp said $30,000 or about 1 million baht is still a high price compared with 500,000 baht four years ago. In addition, another Bitcoin halving is scheduled in two years, causing the supply to fall and the price to recover.

Sanjay Popli, chief executive at Cryptomind, a crypto consulting and investment firm, said sales of risky assets is common to mitigate risk and realign a portfolio with each investor's goals.

In his view, Bitcoin could rebound or decline further. In the worst case, the price can drop to around $22,000, but Mr Sanjay expects Bitcoin to rebound after the market direction becomes clear and the global economy recovers. Long-term investors can buy large-cap coins such as Bitcoin and Ethereum to take profits when prices rebound, he said.

Do you like the content of this article?
COMMENT