Bitcoin (BTC-USD) has fallen to a fresh 21-month low as investors weigh higher-rate risks, a stronger US dollar, and fresh concerns around Strategy Inc. NASDAQ:MSTR, one of the largest corporate buyers of the token. In Asia trading Wednesday, Bitcoin dropped as much as 1.5% to $57,742, its lowest level since Sept. 17, 2024, before recovering some ground to around $58,860 in early New York trading.
The pressure comes as Federal Reserve officials continue to signal a tougher stance on inflation. Fed Chairman Kevin Warsh said last month the central bank would not tolerate high inflation, while Cleveland Fed President Beth Hammack told CNBC Tuesday that rate hikes may be needed to bring inflation back toward the Fed's 2% target. That backdrop has helped push capital away from non-yielding assets like crypto, with investors pulling more than $4 billion from US-listed Bitcoin ETFs in June, the largest monthly outflow since their launch two years ago.
Strategy has added another layer of uncertainty. Investors initially welcomed the company's financing overhaul, including the possibility of stock buybacks and a larger cash reserve, but attention has since shifted to its new flexibility to sell Bitcoin and possibly prioritize balance-sheet management over steady accumulation. Bitcoin is now down more than 50% from its record high above $126,000 in October last year and has fallen below its 200-week moving average, a technical level that could point to a prolonged bear market.