Bitcoin and other cryptocurrencies faced a decline in prices after news of a lawsuit against Binance, the world's largest crypto exchange, by US regulators. The price of Bitcoin fell by 4% over the past 24 hours, reaching $26,800, the lowest in almost two weeks. The CFTC has sued Binance and its CEO, Changpeng Zhao, alleging the violation of rules that require futures and other derivatives to be traded on regulated platforms. This has led to questions on the safety of investors' funds, and crypto exchanges are considered even riskier than banks.
In addition to the Binance news, MicroStrategy purchased 6,455 Bitcoin coins worth $150 million, which typically triggers an adverse market reaction. The shifting outlook around interest rates has also affected Bitcoin's sensitivity to macroeconomic forces and the stock market, since higher rates dampen demand for risk-sensitive assets.
Overall, the dynamics that drove Bitcoin up to its recent peak near $28,500 have shifted, leading to a decline in prices in the immediate term. Ether, the second-largest crypto, lost 2% to $1,730, while altcoins were mixed, with Cardano remaining flat and Polygon slipping 3%. Investors need to keep an eye on the stock market, economic data covering trade and consumer confidence, and public remarks from a Federal Reserve official for the next major macro catalyst.
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