Bitcoin and Ethereum losing value – what’s behind the drops?

Cryptocurrencies and US Stocks Drop – Bitcoin Falls, Ethereum Also Down

Tuesday brought a decline in the value of cryptocurrencies and US stocks, marking the beginning of the second quarter in red for both asset classes.

Bitcoin and Ethereum Experience Drops

Bitcoin lost 5%, currently trading around $65,200. The cryptocurrency dropped from the low of $70,000 over the past weekend. Meanwhile, Ethereum, the second-largest digital currency, saw a 7% decline, hovering around $3,200 on Tuesday afternoon.

US Stocks in the Red Zone as Well

The S&P 500 and Nasdaq Composite indices started the day below, but have slightly rebounded, currently showing about a 1% decrease.

Forecasts on Interest Rates

Futures of fed funds indicate a 40% chance that the Federal Reserve will keep interest rates at the current level until June. Expectations regarding potential changes in interest rates are causing unease among investors.

Bitcoin Halving and Cryptocurrency Price Decline

The decline in cryptocurrency prices comes in the context of the upcoming Bitcoin halving, expected around April 19, 2024. Bitcoin is also approaching its all-time high of $73,780.07 set in March of this year.

Market Reflection via Approval of ETFs

The approval of ETFs based on real currencies has significantly impacted the supply and demand dynamics of Bitcoin, which may affect the cryptocurrency’s price both during and after the halving period.