Bitcoin edged lower on Thursday, weighed down by investor risk aversion following the Federal Reserve's adoption of a hawkish tone, as well as continued US strikes on Iran.
Cryptocurrency prices also declined more broadly, as investors awaited the upcoming earnings report from Strategy Inc. for further clues about the world’s largest institutional Bitcoin reserve.
Bitcoin fell 0.6% to $64,043.80 by 9:05 AM.
Strategy's Q2 results are just around the corner, and Bitcoin sales are in the spotlight.
Strategy Inc (NASDAQ:MSTR) is scheduled to report its second-quarter results after the market closes on Thursday, and is expected to report earnings per share of $0.79 on revenue of $122.93 million.
However, the main focus will be on the company's huge stock of Bitcoin, especially after it began selling part of its holdings this year, for the first time in nearly four years.
The company is expected to record a huge unrealized loss on its Bitcoin holdings, given that the world's largest cryptocurrency has been trading at prices well below Strategy's average acquisition cost of $75,400.00.
The company had already recorded significant losses on its digital asset holdings during the past two quarters.
The company made no Bitcoin purchases in the four weeks leading up to its earnings announcement, while continuing to sell its shares to bolster its cash reserves. Earlier this year, it sold a portion of its Bitcoin holdings to meet capital obligations and address mounting debt, having financed its massive reserve of 843,775 Bitcoins through debt and equity issuances.
Attention will be focused on whether the company led by Michael Saylor intends to signal further sales of its holdings.
Bitcoin is under pressure from interest rate uncertainty and tensions with Iran.
Bitcoin remained on the defensive after the Federal Reserve held interest rates steady as expected on Wednesday evening. However, the decision to hold rates steady came despite calls from at least three members of the central bank to raise rates in the face of persistently high inflation.
Federal Reserve Chairman Kevin Warsh also provided scant details about the bank's plans to maintain its 2% annual inflation target, though he reaffirmed his commitment to that goal, raising concerns about higher interest rates this year.
High interest rates are a negative factor for speculative assets that do not generate returns, such as Bitcoin.
Investor risk aversion also weighed on cryptocurrency markets, as the United States launched a new wave of strikes on Iran late Wednesday, prompting retaliatory responses from Tehran.
These latest strikes came after US President Donald Trump warned that the United States would strike Iran hard in response to recent attacks on US bases in the Middle East.
These strikes resulted in a sharp rise in oil prices, fueling persistent fears that inflation driven by higher energy prices will push the world's major central banks to raise interest rates.
Cryptocurrency prices today: Altcoins fluctuate in line with Bitcoin
Cryptocurrency prices declined more broadly in conjunction with Bitcoin.
Ether, the world's second-largest cryptocurrency, fell 0.9% to $1,903.34, while XRP declined 1.2%.
Solana and Cardano fell by 0.6% and 0.9% respectively, while BNB rose by 0.3%.
The meme coins were mixed, with Dogecoin falling by 1.1%, while $TRUMP added 1.2%.
