Bitcoin Falls to Three-Month Low amid Tech Sell-Off and Strengthening Yen
Bitcoin (BTC) dropped below $89,000 on Tuesday, hitting a low of $88,200, the lowest point since mid-November. This decline comes in a climate of nervousness marked by the continued sell-off of technology stocks on the Nasdaq and the strengthening of the Japanese yen, often seen as a risk aversion indicator for investors.
Stalled Institutional Adoption
The fall in Bitcoin occurs in a context of institutional blockage in the United States. Although President Donald Trump has recently expressed support for Bitcoin, three proposals to integrate BTC reserves at the state level have been rejected in Montana, North Dakota, and Wyoming. This reluctance highlights the political risks associated with state adoption of cryptocurrencies, as policymakers avoid accusations of speculating with public funds.
The accumulation of bitcoins by the Bitcoin Spot ETFs, often seen as an important factor in BTC’s rise, has significantly slowed down in recent days, experiencing several negative days.
The Strength of the Yen and Pressure on Risky Assets
Traditional markets also show signs of caution. Nasdaq futures have lost 0.3% this morning in pre-market trading, extending a three-day decline. Since February 18, the technology index has fallen more than 4%, illustrating a growing risk aversion sentiment.
At the same time, the Japanese yen continued its ascent against the dollar, reaching 149.38 JPY/USD, close to its three-month high. In just six weeks, the Japanese currency has appreciated by nearly 6% due to expectations of interest rate hikes by the Bank of Japan (BOJ).
This resurgence of yen strength revives the specter of last summer, when a BOJ monetary tightening led to a strong wave of risk aversion, causing Bitcoin to plummet from $65,000 to $50,000 in just a few days.
