New Delhi, June 6 (IANS): Bitcoin dropped below the $60,000 mark for the first time since October 2024, extending a sharp reversal that has erased more than half of its value from its October peak of over $126,000. The world’s largest cryptocurrency fell as much as 7 per cent to $59,101 and was trading at $59,743.21 early on Saturday. Market participants attributed the decline to liquidity shifts among institutional investors and capital rotation toward sectors attracting renewed investor interest, including artificial intelligence, defence, energy and infrastructure. Analysts also cited growing competition from gold and AI-related stocks, along with a reassessment of US Federal Reserve rate-cut expectations, as factors dampening demand for cryptocurrencies. Investors are closely watching whether Bitcoin can maintain support in the $60,000–$62,000 range, which could help restore market confidence, while ETF flows, institutional participation, macroeconomic conditions and geopolitical developments are expected to remain key near-term drivers.
Market sentiment toward cryptocurrencies weakened further after US President Donald Trump nominated Kevin Warsh as his choice for Federal Reserve chair, with investors viewing the prospect of a more hawkish Federal Reserve as potentially reducing liquidity that has supported risk assets. A recent report also highlighted sustained institutional withdrawals, including more than $3 billion in outflows from US spot Bitcoin exchange-traded funds in January, adding longer-term pressure on crypto assets. Market watchers have warned of potential forced liquidations among crypto miners if prices continue to decline and cash flow pressures intensify. Despite the recent downturn, some experts believe the next phase of cryptocurrency growth will be driven by greater regulatory clarity, innovation in stablecoins and the tokenisation of real-world assets. They advised investors to focus on long-term investment horizons, risk management and portfolio allocation rather than short-term price fluctuations. Bitcoin had previously surged to record highs after becoming a market favourite following the re-election of US President Donald Trump.