The cryptocurrency Bitcoin witnessed its first quarterly decline this year, with its price falling significantly from what it was three months ago. In July, the price of Bitcoin reached about $31,000, while it is currently trading at a level below $27,000, equivalent to... They declined by about 13% during the third quarter of 2023.
Bitcoin is up 83% in the first two quarters of 2023, but has traded in a relatively narrow range over the past few months amid an uncertain macroeconomic environment. While the Fed left interest rates unchanged at its September meeting, it signaled that interest rates would remain high for longer to combat inflation.
Higher interest rates tend to reduce appetite for riskier assets such as cryptocurrencies.
Some investors expected a sharp rise in demand for Bitcoin if the SEC approved the establishment of Bitcoin exchange-traded funds (ETFs), but the SEC postponed its decisions on ETF proposals from BlackRock, Ark 21Shares, and GlobalX.
Furthermore, some have predicted a potential rally similar to what the markets witnessed in March 2023 if the US federal government shuts down. During that month, Bitcoin jumped by about 25% following the announcement of the bankruptcy and default of many small and medium-sized American banks.
With its first quarterly decline of 2023 now under way, Bitcoin faces continued uncertainty in the fourth quarter amid mixed signals on regulation and macroeconomics. While some see signs of a potential future rally, Bitcoin's near-term path remains unclear.
