Bitcoin tumbled in reaction to reports that the United States is planning to reduce its balance sheet by selling off bonds. This move saw a record selling between Wednesday and Thursday.
On Wednesday, it was circulated that the US Federal Reserve had resolved to cut its hold on bonds after meeting in December. The government purchases bonds to keep interest low, but its projected plan triggered an increase in bond yields, CNBC disclosed.
During the same period, bitcoin and other altcoins nosedived in value, extending their bearish run in 2022. BTC’s selling price has shed over 6% between Tuesday (pre-report release) and Friday.
Ripples Nigeria analysis showed bitcoin holders lost over $50.34 billion during the four days period, as its market capitalisation spilled to $818.04 billion from $868.38 billion.
As the most popular cryptocurrency rolled off the hill, it lost $2,744 in the process after sell pressure deflated the crypto asset’s value to $43,153.57 in the early hours of Friday [as at the time of filing this report] from Tuesday’s $45,897.58, according to Coinmarketcap tracking.
Although, bitcoin had traded as low as $42,435.40 in the last 24hours, its lowest in the last one month. The sentiment in the cryptocurrency market was overwhelmed by the decision of the US government to sell bonds.
The crypto investors are believed to be eyeing the bonds market as they seek safe haven for their money amid the struggle of the decentralised market to hit a bullish run – investors will be attracted to the bonds with improved rates.
It was gathered that on Thursday, 207,527 traders liquidated their positions, with over $800 million worth of trades exiting the crypto market – the destination remains unknown, but with the reduction in balance sheet projected to start in some months time (summer in view), these funds are expected to trickle down to the bonds market.
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