Bitcoin plummeted to its lowest level in over two years, reaching as low as $57,742 on Wednesday. This marked a 21-month low for the digital currency, before it steadied by 10 am in Singapore.
The downturn was largely attributed to the prospect of higher interest rates and concerns about Strategy Inc., a major corporate buyer of Bitcoin. Hawkish comments from US Federal Reserve policymakers have fueled expectations for increased borrowing costs, which has led investors to pull capital away from assets like cryptocurrencies that don't pay a yield.
Investors pulled more than $4 billion from US-listed Bitcoin exchange-traded funds in June, the largest outflow since their inception two years ago. Analyst Tony Sycamore of IG Australia noted that Bitcoin has faced growing headwinds due to shifting Fed rate expectations and a stronger US dollar.