Bitcoin dropped to its lowest level in six months on Friday, as a broad sell-off in risk assets deepened amid fading hopes that the Federal Reserve will cut U.S. interest rates at its upcoming policy meeting.
Selling in U.S. equities, however, eased slightly in the afternoon ahead of the weekend, but investors stayed on edge as they braced for a slew of economic data next week following the government’s reopening after a record 43-day shutdown.
Risky assets overall have come under pressure in recent days as expectations of a rate cut from the Fed next month have shrunk as a growing number of policymakers signaled an inclination to hold off on easing.
Kansas City Fed President Jeffrey Schmid, a voter on the policy-setting Federal Open Market Committee, was the latest central bank official to express doubts about a December rate cut. He said on Friday his concerns about “too hot” inflation go well beyond the narrow effects of tariffs alone. Markets now price in about a 40% chance of a December rate cut, down from about 90% earlier this month and just over 60% earlier this week.
In early afternoon trading, bitcoin, the world’s largest cryptocurrency, was last down 2.3% at $96,564, having earlier dropped to $95,885.33, its lowest since May 7. Ether, the second-largest cryptocurrency, was last flat on the day at $3,175.22 , after dropping to a 10-day low. Since peaking on October 7, the crypto market capitalization has fallen by more than $1 trillion, or 24%. The backdrop for bitcoin remains bearish, analysts said.
Long-term bitcoin holders have accelerated profit-taking, according to crypto research firm Glassnode. Those long-term bitcoin holders have sold 815,000 bitcoin over the past 30 days, a record high since January 2024, according to CryptoQuant, another digital asset research firm.
