ALBAWABA - Bitcoin experienced its first quarterly decline of the year, with its price significantly dropping from where it stood three months ago. In July, the price of Bitcoin was around $31,000, but it is currently trading at less than $27,000, marking a decline of approximately 13% in the third quarter of 2023.
Bitcoin had surged by 83% in the first two quarters of 2023, but it has been trading relatively narrowly in recent months amidst an uncertain overall economic environment. While the Federal Reserve kept interest rates unchanged at its September meeting, it indicated that interest rates would remain elevated for a longer period to combat inflation.
High-interest rates tend to reduce interest in high-risk assets like cryptocurrencies.
Some investors anticipate a sharp increase in demand for Bitcoin if the Securities and Exchange Commission approves the establishment of Bitcoin exchange-traded funds (ETFs). However, the SEC has delayed its decisions on ETF proposals from BlackRock, Ark 21Shares, and GlobalX.
Furthermore, some expect a potential surge similar to what the markets witnessed in March 2023 if the US federal government were to shut down. Bitcoin jumped by around 25% that month following announcements of the bankruptcy and distress of several smaller and mid-sized US banks.
With its first quarterly decline in 2023, Bitcoin now faces ongoing uncertainty in the fourth quarter amid conflicting signals regarding regulation and the overall economy. While some see signs of a potential rise in the future, the short-term path for Bitcoin remains unclear.
