Bitcoin Plummets 24% in 46 Days as Crypto Falls on Rising Inflation
October 3: $84,680 Today: $64,108 Bitcoin dropped 24.2% in 46 days. And it "fell more than 4% on Friday to $68,500," reports Fortune, "wiping out gains built over the past three months and casting doubt on whether its bear market was ever really over." The asset also faces weaker investor appetite, according to crypto analytics provider CryptoQuant. The firm's demand indicator recorded its…
In the span of 46 days, Bitcoin's value plummeted by 24.2%, according to Fortune. The cryptocurrency had already declined over 4% on Friday, erasing gains made over the past three months and raising questions about whether a bear market had truly concluded. CryptoQuant, a crypto analytics provider, noted that demand for Bitcoin hit its lowest level since December 2023, while Bitcoin exchange-traded funds became net sellers once again.
The downward trend affected other cryptocurrencies as well. Tether's USDT, the largest cryptocurrency tied to the U.S. dollar, saw its total value decrease by $7.7 billion over the past two months, indicating a reduction in the amount of cash available in crypto markets. This decline coincides with rising inflation, which was highlighted in the October Consumer Price Index report.
Inflation surpassed expectations, with prices increasing by 0.4% in October, even excluding food and energy. Traders are now anticipating a quarter percentage point interest rate hike from the Federal Reserve in December, with some predicting an even larger increase.
The reduction in demand for Bitcoin and other cryptocurrencies is attributed to inflation and the expectation of rising interest rates. Chris Beauchamp, chief market analyst at IG Group, stated that investors are shifting funds from Bitcoin and gold to government bonds that offer income. Additionally, heavy borrowing and spending on AI has created an "AI black hole," diverting money away from Bitcoin and gold.
The tech sell-off, particularly involving Nvidia, has also impacted the crypto markets, as the two sectors are interconnected in some ways.
Despite Bitcoin's strong correlation with tech stocks, it remains vulnerable to fluctuations in investor enthusiasm for AI. Bitcoin has lost more than 20% of its value since the beginning of 2026. Therefore, the cryptocurrency faces challenges in retaining investment dollars during periods of high AI enthusiasm and also suffers when that enthusiasm wanes.
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