Bitcoin marked its first weekly decline since Donald Trump’s election victory, as the US Federal Reserve’s cautious policy outlook tempered optimism over the president-elect’s embrace of the cryptocurrency sector.
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The largest digital asset was down more than 7 per cent for the seven-day period through 9:27am on Monday in Singapore, the biggest such drop since September.
A wider cryptocurrency market gauge, encompassing smaller tokens such as ether and meme-crowd favourite dogecoin, suffered a sharper decline of about 10 per cent.
The Fed on Wednesday delivered a third straight interest-rate cut, while signalling a slower pace of monetary easing next year to keep inflation in check, sending global stocks into a tailspin.
The hawkish pivot also dampened the speculative spirits unleashed in the cryptocurrency market by Trump’s pledge of friendly regulations and his backing for a national bitcoin stockpile.
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A record outflow from US exchange traded funds investing directly in bitcoin last week will weigh on prices in the near term, said Sean McNulty, director of trading at liquidity provider Arbelos Markets.