Bitcoin Hits Lowest Level Since June Due to Global Sell-Off
Today, the price of the most popular cryptocurrency, Bitcoin, dropped to a new two-month low amid a worldwide market sell-off.
According to WSJ, the expiration of weekly BTC options worth about $570 million on Friday added to the volatility.
Early on Thursday, the leading cryptocurrency fell by 7.2% to $28,346, its lowest level since June 21. This marked the biggest single-day drop since November 2022, when the major exchange FTX crashed. The ongoing decline, which started earlier this week, reflects risk aversion on Wall Street.
Global markets have been affected by a wave of sell-offs: major Wall Street indices closed lower on Thursday. Concurrently, Asian shares are falling for the third week due to concerns about China's economy and fears that the US interest rates will remain higher for longer due to a robust economy.
Joseph Edwards, Head of Research at Enigma Securities, explained the Bitcoin price change as a result of low volatility and lack of enthusiasm from retail investors.
Some investors interpreted this move as a sign that the US Securities and Exchange Commission (SEC) will approve spot ETF applications for Bitcoins from various asset managers, including Grayscale.
The declining BTC volatility comes a few days after the US Commodity Futures Trading Commission's (CFTC) Commitment of Traders (COT) report revealed that leveraged funds - hedge funds and commodity trading advisors - increased their bearish bets on CME-listed Bitcoin futures with cash settlements for the week ending August 8.
Ether, the second-largest cryptocurrency, stabilized around $1690.20 ETH=BTSP after also experiencing a sharp drop on Thursday.
Meanwhile, payment giant PayPal will temporarily suspend cryptocurrency purchases in the United Kingdom until early 2024. The company announced this on Wednesday, citing stricter rules from the country's financial regulator.
The company stated that customers who previously bought crypto assets through their PayPal accounts can store them on the platform or sell them at any time. However, the ability to make new purchases will be turned off starting October 1.
"We are taking this action in response to new rules adopted by the UK's Financial Conduct Authority (FCA), which require crypto firms to take additional steps before customers can buy cryptocurrency," PayPal's statement said.
This move comes as the company has accelerated its cryptocurrency operations in recent weeks, especially in the United States with the launch of PayPal USD (PYUSD) stablecoin, which the payment giant announced earlier this month.