June 13 2024: Bitcoin’s price slipped on Thursday during a volatile session, as the Federal Reserve’s forecast of higher-for-longer interest rates overshadowed signs of cooling near-term inflation.
The world’s largest cryptocurrency dropped 2.1% in the past 24 hours to $67,850.9 by 08:30 ET (12:30 GMT). Bitcoin experienced significant swings this week, reaching as high as $70,000 before declining sharply.
Bitcoin Remains Rangebound Amid Fed’s Rate Cut Forecast
Traders stayed cautious about Bitcoin and broader cryptocurrencies due to the anticipation of prolonged high U.S. interest rates. Although the Fed kept rates unchanged on Wednesday, Chair Jerome Powell indicated the possibility of only one rate cut this year, as opposed to the previously expected three cuts.
Several policymakers also advocated for no rate cuts this year, emphasizing the need for further progress in reducing inflation. The Fed also increased its inflation forecast for the year.
These comments followed data showing U.S. consumer inflation eased slightly more than expected in May. Bitcoin initially gained after the inflation data but lost ground following the Fed’s comments.
High interest rates are generally unfavorable for speculative assets like cryptocurrencies, as they restrict liquidity available for investment in the sector. Recent data showed some institutional investment in crypto, but this was not significantly reflected in token prices.
Traders are now focusing on the producer price index inflation data for further insights into U.S. inflation, with the reading due later on Thursday.
Crypto Prices Today: Altcoins Decline Amid Rate Concerns
The outlook of prolonged high U.S. interest rates also pressured broader cryptocurrency prices. Ether, the world’s second-largest token, fell 3.3% to $3,516.65, giving up gains from the previous month. Solana and XRP dropped 2.1% and 0.1%, respectively, while Cardano rose 0.5%, although all three coins were down for the week.
Among meme tokens, SHIB dipped 2.4% while DOGE rose 2.5%. However, interest in both tokens cooled, mirroring diminishing interest in meme stocks on Wall Street.
GameStop Corp (NYSE
) continued to decline, erasing most of the gains from a late-May rally.
MicroStrategy Plans to Offer Convertible Notes to Buy More Bitcoin
Business intelligence firm and largest corporate holder of Bitcoin, MicroStrategy, announced on Thursday that it will offer $500 million in convertible senior notes due 2032. The proceeds will be used to purchase additional Bitcoin and for other corporate purposes. The offering depends on market conditions with no guaranteed timing or terms.
“MicroStrategy also expects to grant to the initial purchasers of the notes an option to purchase, within a 13-day period starting from the issuance date, up to an additional $75 million aggregate principal amount of the notes,” the company stated in the announcement.
MSTR shares were down 1.4% in premarket trading. Starting June 20, 2029, MicroStrategy may redeem all or part of the notes for cash, subject to certain conditions. The private offering will be available to institutional buyers qualified under Rule 144A of the Securities Act of 1933.
MicroStrategy currently holds 214,400 BTC, valued at over $14 billion, making it the largest public-listed Bitcoin holder.
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