TL;DR
- Bitcoin experiences its worst monthly performance since the collapse of FTX in 2022, with a value drop of nearly 17.35% in April.
- Loss of interest in US Federal Reserve interest rate cuts and risk aversion contribute to the outflow of capital from BTC-related products.
- BTC’s decline drags down the entire crypto market, with Ether experiencing its biggest monthly plunge since June 2022, and shares of companies plummeting.
The crypto market is experiencing turbulent times, marked by the decline in Bitcoin’s price and a series of factors that have eroded investor confidence. In April, BTC recorded its worst monthly performance since Sam Bankman-Fried’s FTX collapse in 2022.
During this period, the value of Bitcoin fell by almost 17.35%, placing it at its lowest level since late February. This downward trend has raised concerns among investors, especially those who entered the market during the downturns in 2022 and 2023, as well as ETF investors who witnessed the bullish price rally since early 2024.
According to the latest Coinmarketcap data, Bitcoin (BTC) is trading at $57,448, marking a daily decline of 6.2%, yesterday morning it was trading above $60,000. On a weekly basis, the cryptocurrency’s fall amounts to 13.66%, leaving it nearly $10,000 below values from 7 days ago. Regarding the monthly level, the loss exceeds 17.3%. After a bleak month, BTC dropped $16300 from its ATH, from $73,750.
The decline of interest in US Federal Reserve interest rate cuts and the loss of appeal of risky investments have contributed to the outflow of capital from Bitcoin-related products. In particular, ETFs saw a net outflow of $182 million in April, in contrast to a net inflow of $4.6 billion in March.
Bitcoin Falls and Drags Everything Along
The decline affected the entire market in general. Ether, the second largest cryptocurrency, suffered an 18% drop in April, marking its biggest monthly plunge since June 2022. Regulatory uncertainty, including the SEC’s review of Ether, combined with the possible rejection of ETFs and a recent lawsuit against Consensys, have contributed to ETH’s volatility.
In addition, shares of companies related to crypto mining, such as Marathon Digital Holdings Inc. and Riot Platforms Inc., also suffered massive losses. MicroStrategy Inc., known for its Bitcoin corporate strategy, faced an 18% drop after reporting a loss in the first quarter due to an impairment charge on the value of its BTC holdings.
On the macroeconomic front, although no changes in interest rates are expected, there is a possibility that the Federal Reserve will not cut rates for the rest of the year, which could negatively affect interest rate-sensitive assets such as cryptocurrencies.
