Bitcoin's Price Declines Amid Weak Risk Appetite

Bitcoin’s price fell on Wednesday as appetite for risk-driven assets remained weak amid uncertainty over the U.S. election and as traders positioned for smaller interest rate cuts by the Federal Reserve.

The world’s biggest cryptocurrency fell 0.5% to $67,161.7 by 01:02 ET (05:02 GMT) after largely failing to break past $70,000 earlier this week.

Declines in global stock markets also signaled that risk appetite remained weak, while the upcoming expiry of about $4 billion in Bitcoin options is expected to increase crypto market volatility in the coming days.

Bitcoin Hit by Uncertainty Over Presidential Election

Recent polls and online prediction markets showed Republican nominee Donald Trump gaining an edge over Democratic candidate Kamala Harris in the 2024 presidential election.

However, the race was still seen as too tight to call, especially with about two weeks left to the ballot.

While increased optimism over a Trump presidency initially boosted crypto prices, as elections drew closer, that enthusiasm appeared to fade.

Trump has maintained a pro-crypto stance, promising to roll out crypto-friendly regulation if elected. Harris has also recently pledged to establish a crypto regulatory framework.

Rate Jitters Dampen Crypto as Dollar Firms

Crypto markets faced pressure from a stronger dollar, as growing expectations of a slower pace of interest rate cuts by the Federal Reserve pushed the dollar to near three-month highs.

Traders were seen pricing in a greater chance the Fed will cut rates by a smaller 25 basis points in November and positioning for a higher terminal rate. This notion saw Treasury yields surge to near three-month highs, putting pressure on risk-driven assets.

Higher rates bode poorly for speculative assets like crypto, given that they limit the amount of liquidity available for investing in the sector.

Crypto Price Today: Altcoins Track Bitcoin Weakness

Among broader crypto markets, altcoin prices fell on Wednesday, tracking Bitcoin's weakness.

World no.2 crypto Ether fell 1.4% to $2,610.01 and is also expected to see increased volatility this week with the expiry of about $1 billion in Ether options.

XRP, SOL, MATIC, and ADA fell between 0.4% and 3%, while among meme tokens, DOGE slid 4.7%.