Bitcoin, which fell to $60,000 in February, subsequently rose, but the sharp declines in June brought it below that level as well.
Bitcoin’s rapid drop from $83,000 in May to $60,000 is thought to be influenced by factors such as Fed expectations, ETF outflows, and Strategy’s expectation of Bitcoin sales.
At this point, Grayscale, one of the world’s largest cryptocurrency fund companies, analyzed the reasons for the decline in Bitcoin and listed its expectations for the future.
In a recent report, Grayscale listed four main reasons for the decline in Bitcoin. The first, they stated, was a shift in expectations regarding the Federal Reserve.
According to analysts, the market was expecting interest rate cuts from the Fed at the beginning of the year, but now even interest rate increases are on the agenda.
The second reason cited for the decline was the delay and uncertainty surrounding the Clarity Act in the US, which is seen as bullish for cryptocurrencies.
“…The highly anticipated Clarity Act has still not passed. And the likelihood of it passing is decreasing day by day. Therefore, a wait-and-see attitude prevails in the market.”
We expect corporate investments to increase significantly once the law is passed.”
Analysts cite the $BTC sales and subsequent decline in the stock of Strategy, the largest institutional Bitcoin investor, as a third reason, while finally, quantum concerns also believe that fueled the decline.
Despite the sharp declines in Bitcoin, Graysacle analysts stated that they remain incredibly optimistic about Bitcoin and cryptocurrencies in the medium to long term.
At this point, analysts argue that the passage of the Clarity Act in the US and the Fed’s monetary policy are key variables that will determine Bitcoin’s future price.
Analysts suggest that if the CLARITY Act for Bitcoin and altcoins passes the Senate, Strategy strengthens its financial structure, and the Fed halts interest rate hikes, $BTC may be nearing its bottom.
“…However, conversely, if the bill doesn’t pass this year, the risks to Strategy will not diminish, and if the FED raises interest rates due to inflation, $BTC may experience further declines.”
*This is not investment advice.
