The slide could underscore broader risk-off sentiment fueled by anxiety around the Federal Reserve’s plans for future interest rate cuts.
The price of Bitcoin (BTCUSD) extended its slide Thursday, and altcoins including Ether (ETHUSD) and Solana (SOLUSD) fell even harder — likely disappointing those expecting October gains to materialize by tomorrow. The world’s most well-known cryptocurrency is now below $107,000, down more than 6% so far this month — and 15% from its record high on Oct. 6 — while Ether and Solana have each fallen about 10% in October.
The slide could underscore broader risk-off sentiment fueled by anxiety around the Federal Reserve’s plans for future interest rate cuts, after Fed Chair Jerome Powell said yesterday that another cut in December is “far from” guaranteed.
That “prompted traders to scale back expectations,” Vugar Usi Zade, COO at crypto exchange Bitget told Investopedia. U.S.-listed Bitcoin and Ethereum exchange-traded fund flows, including Fidelity Wise Origin Bitcoin Trust (FBTC) and ARK 21Shares Bitcoin ETF (ARKB), showed “signs of investor caution,” as they collectively saw $550 million in outflows as of Oct. 29, he said.
Crypto markets had already taken a hit after a Black Friday-like event on Oct. 10, when more than $19 billion in crypto positions were wiped out. Weeks later, a couple of digital asset treasury companies, or DATCOs, said they were selling the crypto in their stockpiles mere months after acquiring them.
ETHZilla (ETHZ), a former biotech firm that pivoted to stockpiling ether in August, sold roughly $40 million from its treasury to fund share repurchases, the company disclosed Monday. Its CEO said in a statement that the company planned to continue on that path with the goal of reducing the number of shares available as well as shrinking the gap between its stock price and the net asset value of its underlying holdings.
Some of the more high-profile DATCO shares including Tom Lee’s BitMine Immersion Technologies (BMNR), Eightco Holdings (ORBS), and SharpLink Gaming (SBET) have fallen sharply from their peaks, down at least 70%.
As DATCO shares started trading at a discount to their crypto holdings, which would hamper their ability to continue funding their treasuries, there was some concern that they would trigger a broader wave of selling. Weakness in DATCOs led to some volatility in parts of the market, but there’s no evidence that they triggered a selloff, according to Zade.
