Bitcoin Drops Amid Fed Concerns, Corporate Buying Surges

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Global cryptocurrency markets saw a sharp decline on Monday, with Bitcoin falling below $116,000 after reaching a peak above $124,000 last week. The drop was driven by investor caution amid softer expectations for U.S. Federal Reserve rate cuts and ongoing geopolitical uncertainties.

At 10:10 ET (14:10 GMT), Bitcoin traded 2.7% lower at $115,160. Ethereum also retreated, falling nearly 6% to $4,281.39. Analysts attributed the broad sell-off to rising concerns over U.S. inflation and its impact on interest rate policies.

Data released recently showed higher-than-expected U.S. producer prices, dampening expectations of a substantial rate cut in September. Market participants now anticipate a smaller 25-basis-point reduction, according to CME FedWatch data. The inflation-driven uncertainty weighed on risk assets, with investors turning to safe-haven options like gold.

Cryptocurrency markets also responded to ongoing international developments, including discussions between U.S., Russian, and Ukrainian officials. Analysts note that such events increase short-term volatility, given cryptocurrencies’ sensitivity to shifts in global risk sentiment.

Despite market fluctuations, corporate interest in Bitcoin remains strong. Amsterdam-based Amdax plans to launch a bitcoin treasury company, AMBTS (Amsterdam Bitcoin Treasury Strategy), on the Euronext Amsterdam exchange. CEO Lucas Wensing cited growing corporate holdings of Bitcoin, now over 10% of the total supply, as a reason for the new treasury-focused entity.

Additionally, publicly traded company Strategy (NASDAQ: MSTR) added 430 BTC worth $51.4 million to its holdings, bringing its total Bitcoin holdings to approximately 629,376 BTC, with a total investment value of roughly $72.4 billion.

Overall, cryptocurrency markets remain highly volatile, influenced by economic data, corporate investments, and geopolitical developments. Analysts advise continued monitoring of these factors as investors react to global fiscal policies and market trends.