Bitcoin traded below the $62,000 mark on Thursday, hovering near its lowest levels of the year and underperforming the broader rally in risk-sensitive assets as investors continued to withdraw funds from crypto exchange-traded funds (ETFs).
The world’s largest cryptocurrency rose 1.13 percent to $61,678 as of 9:52 GMT, after briefly slipping below the $60,000 mark on Wednesday, and remaining close to the 18-month low reached earlier in June.
Investors eye Fed outlook as ETF outflows increase
The crypto market continued to face headwinds amid rising expectations that the U.S. Federal Reserve could maintain elevated interest rates for an extended period or potentially implement another rate hike this year.
Market participants were closely watching the upcoming U.S. Personal Consumption Expenditures (PCE) price index report, the Fed’s preferred measure of inflation, for further signals on the interest rate outlook.
Cryptocurrency markets have remained sensitive to the prospect of higher borrowing costs after the Federal Reserve struck a hawkish tone at its June policy meeting. Elevated interest rates tend to weigh on non-yielding assets such as cryptocurrencies by increasing the appeal of interest-bearing investments.
Further putting pressure on the market, Bitcoin spot ETFs recorded increased outflows on Wednesday as investors continued to shift capital toward AI-related stocks and other assets backed by stronger underlying fundamentals.
Spot Bitcoin ETFs saw net outflows of $469 million during the session, marking their largest single-day withdrawal since June 2.
The funds were also on track for a seventh consecutive week of outflows, highlighting weakening appetite for cryptocurrencies among both institutional and retail investors.
Read: Bitcoin slips 2.6 percent to $62,871 as crypto markets lose momentum on Fed uncertainty
Investors continue to favor AI-linked stocks
Data from Glassnode showed Bitcoin continued to trade at a notable discount on Coinbase relative to the global average price, indicating subdued retail demand in the United States.
Cryptocurrencies have steadily lost momentum this year as investors favored assets with clearer growth drivers and earnings visibility. AI-linked stocks have been among the main beneficiaries of this shift, with global semiconductor shares surging on Thursday after memory chipmaker Micron Technology reported strong earnings.
The broader cryptocurrency market traded mostly sideways on Thursday, with major digital assets posting modest declines. The world’s second-largest cryptocurrency, Ether, slipped 1.21 percent to $1,647.34.
Other leading altcoins also edged lower, with XRP, Solana, Cardano, and BNB recording losses between 0.64 percent and 1.66 percent.
Among meme tokens, Dogecoin fell 2.5 percent, while the Trump-themed token $TRUMP declined 1.61 percent.
