Investing.com-- Bitcoin price dropped on Thursday, witnessing little relief amid continued pressure from concerns over high U.S. interest rates and increased regulatory scrutiny against some of the crypto industry’s biggest players.
The token once again drifted towards the lower end of a trading range seen through most of the last two months. Bitcoin had also slid as far as $57,000 in late-April, entering a bear market from record highs hit in early-March.
Bitcoin fell 1.65% in the past 24 hours to $61,215 by 08:28 ET (12:28 GMT). The token was also reeling from sustained outflows from crypto investment products, particularly spot Bitcoin exchange-traded funds.
Regulatory fears continue to chip away at Bitcoin
Concerns over increased U.S. regulatory scrutiny against crypto remained in play, after trading app Robinhood Markets Inc (NASDAQ:HOOD) said it was facing regulatory action from the Securities and Exchange Commission (SEC) over the trade of crypto tokens on its platform.
Potential action against Robinhood could add to the current cases the SEC already has running against exchange Coinbase Global Inc (NASDAQ:COIN) and XRP issuer Ripple, both of which are expected to determine the nature of cryptocurrencies under U.S. law.
The SEC was also reportedly investigating world no.2 token Ethereum over its nature as a security. The regulator postponed a decision on approving spot Ethereum ETFs this week, and appears unlikely to approve the ETFs until its investigation is concluded.
A report released earlier this week alleged that over 90% of all transactions in stablecoins were artificial, raising concerns over more regulatory scrutiny against the sector, which is a key pillar of the crypto industry.
Crypto market faces potential headwinds as $2bn of altcoins to be unlocked
As cryptocurrencies remain in a corrective phase, a series of supply events valued at billions could further delay significant recovery.
According to a Wednesday report by 10x Research, nearly $2 billion worth of token unlocks over the next ten weeks could negatively impact the altcoin market.
These unlocks often have a bearish impact as they increase supply by releasing assets previously held in vesting contracts to team members, organizations, and early investors such as venture capital firms.
Over the next two months, nearly $97 million in Aptos (APT), $79 million in StarkWare (STRK), $94 million in Arbitrum (ARB), $53 million in Immutable X (IMX), $330 million in Avalanche (AVAX), $64 million in Optimism (OP), $28 million in PRIME, and nearly $1 billion in Sui (SUI), among others, will be introduced into circulation, the report indicates.
"Venture capital investors might be pressured to lock in recent gains, which could cap any upside performance of tokens with positive momentum, especially those where unlocks become available," the report states.
Moreover, over $11 billion in Bitcoin is set to be distributed to creditors of Gemini's Earn program and the now-defunct Mt. Gox crypto marketplace, per a Tuesday report by K33 Research analyst Velte Lunde.
"The next months are rigged to see waves of good old crypto FUD," said Lunde, referring to the popular acronym for fear, uncertainty and doubt (FUD).
Recent reports also showed that customers of the now-defunct exchange FTX will receive their deposits back, with interest, although it was unclear whether the payments will be in cash or crypto.
Crypto price today: altcoins tread water, more rate cues awaited
Beyond Bitcoin, other major crypto tokens also saw little relief on Thursday. Ethereum fell 0.7% and Solana lost 1.7%, while XRP rose 1.5%.
Traders remained largely biased to the dollar after a string of Federal Reserve officials warned that U.S. interest rates were likely to remain high for longer in 2024- a scenario that bodes poorly for risk-heavy crypto markets.
Focus is now on upcoming comments from more Fed speakers, as well as key U.S. inflation data due next week.