Bitcoin fell to a six-month low on Friday as a broad sell-off in riskier assets deepened amid fading hopes that the Federal Reserve will cut U.S. interest rates at its next policy meeting.
However, the sell-off in US stocks eased slightly in the afternoon ahead of the weekend, but investors remained on edge as they prepared for a slew of economic data next week following the government’s reopening after a record 43-day shutdown.
“Bitcoin and cryptocurrencies in general have enjoyed a positive correlation with good times in stocks, so they haven’t become an alternative value asset to hedge against fears in other sectors,” said Juan Perez, director of trading at Monex USA in Washington.
Risky assets have generally come under pressure in recent days as expectations for a rate cut by the Federal Reserve next month have diminished, while a growing number of policymakers signaled a bias against easing policy.
Kansas City Federal Reserve President Jeffrey Schmid, a voter on the policy-setting Federal Open Market Committee, was the latest central bank official to express doubts about a December rate cut. He said Friday that his concerns about “very high” inflation go beyond the narrow effects of rates alone.
Bitcoin, the world’s largest cryptocurrency, fell 2.3% to $96,564, having previously fallen to $95,885.33, the lowest level since May 7.