Bitcoin fell to its lowest level in nearly three months on Friday amid growing expectations of further interest rate hikes and concerns over Strategy’s exclusion from MSCI indexes, dampening investor interest in cryptocurrencies.
The largest cryptocurrency by market capitalization fell 6.3% to $69,101.1 by 06:40 Moscow time, dropping below the $70,000 mark for the first time since mid-August.
Bitcoin continued its decline, which began in October, under pressure from a growing number of negative factors affecting cryptocurrency markets.
The prospect of further interest rate hikes by the Federal Reserve was the main source of pressure, with markets increasingly leaning toward the view that the central bank will raise rates as soon as December.$BTC
According to CME FedWatch data, markets are pricing in a 25–50 basis point rate hike in December after October's consumer inflation data came in above expectations.
Higher interest rates generally weigh on speculative assets such as cryptocurrencies, limiting market liquidity and redirecting capital into safer instruments such as government bonds.
Historically, Bitcoin has performed poorly in high-interest-rate environments.
Growing concerns over U.S. regulatory policy added further pressure to cryptocurrency markets after the Democratic Party secured majorities in both chambers of Congress.
A number of influential Democrats have called for stricter anti-money laundering and risk management rules in the cryptocurrency sector—a trend that could lead Congress to pass tougher legislation for the industry.
Another risk factor for Bitcoin this week was Strategy, after MSCI announced that the world's largest corporate holder of Bitcoin, along with similar companies, would be excluded from its benchmark indexes starting November 30.
