Bitcoin spent most of August trending lower, as the world's biggest cryptocurrency was dented by persistent concerns over token distributions and mass sale events
Bitcoin price edged lower on Thursday amid caution ahead of a key U.S. inflation reading that will likely influence the outlook for interest rates cuts.
However, the world’s biggest cryptocurrency was nursing a steep decline in August, as a broader risk-off move across financial markets hit crypto prices particularly hard.
Bitcoin fell 1.2% to $59,726.0 by 08:46 ET (12:46 GMT), and was set to lose nearly 9% in August.
Bitcoin nurses August losses amid slew of headwinds
Bitcoin spent most of August trending lower, as the world’s biggest cryptocurrency was dented by persistent concerns over token distributions and mass sale events, especially from defunct exchange Mt Gox.
Slowing capital inflows into crypto also weighed, especially as initial hype over the launch of spot Bitcoin exchange-traded funds now appeared to have petered out.
This, according to a recent report from blockchain analytics firm Glassnode, appeared to have largely quashed speculative activity in the token, which presented few immediate cues for price movement.
Retail interest in Bitcoin was also seen largely dwindling in recent months.
Concerns over a U.S. recession sparked deep losses across global financial markets at the beginning of August, with crypto seeing no exception. But while broader markets, especially stocks, recovered from these initial losses, crypto has so far struggled.
Bitcoin established a trading range of $50,000 to $60,000 over the past month, and has struggled to remain above $60,000 for extended periods.
Crypto price today: PCE data on tap, caution persists
Broader cryptocurrency prices drifted lower in tandem with Bitcoin, and were also nursing losses for August.
World no.2 crypto Ether lost 1.6% to $2,529.75, and was down a whopping 22.2% in August- its worst month since a rout seen in January 2022.
Other altcoins XRP, SOL and ADA fell between 1.4% and 4%, and were also down for August. MATIC shed 4.5%.
Markets were largely on edge before key PCE price index data due later in the day. The reading is the preferred inflation gauge of the Federal Reserve, and is likely to factor into the central bank’s stance on interest rates.
Lower rates bode well for cryptocurrencies, given that they free up more liquidity for speculative trade.
Traders are pricing in a greater chance of a 25 basis point cut in September, according to CME Fedwatch.
Elon Musk wins Dogecoin manipulation lawsuit, prices little changed
Among meme tokens, Dogecoin fell 1%, taking little support from the dismissal of a lawsuit alleging Elon Musk and Tesla (NASDAQ:TSLA) manipulated the price of the meme token.
Musk had made a series of posts on social media website Twitter, now known as X, hyping up Dogecoin.
He had also briefly teased the prospect of accepting DOGE as payment for Tesla vehicles. The carmaker currently accepts DOGE as payment for Tesla merchandise, according to its website.
WazirX sets aside millions of dollars to recover stolen assets, cover legal costs
In other crypto-related news, troubled cryptocurrency exchange WazirX has earmarked millions of dollars to cover legal expenses following the theft of hundreds of millions in cryptocurrency during a devastating cyberattack in July that severely impacted the Indian exchange.
Singapore-based Zettai Pte Ltd, the parent company of WazirX, on Wednesday submitted an affidavit to the High Court of Singapore, seeking a 30-day moratorium. This pause is intended to facilitate discussions with investors and creditors, aiming to stabilize the platform.
If approved, the moratorium is considered crucial for maintaining the platform's operations and preventing additional legal complications.
WazirX has halted withdrawals as it works to recover user funds following the breach, which saw attackers make off with $230 million in various cryptocurrencies, including $102 million in Shibu Inu tokens. The attack has left many users in a difficult position and significantly damaged trust in the exchange.
In an effort to alleviate investor concerns, Nischal Shetty, WazirX's co-founder, stated on Thursday that the exchange is actively working to resolve the issue as quickly as possible.
Meanwhile, rival exchange CoinSwitch has taken legal action against WazirX over funds that are currently inaccessible on its platform.
Zettai stated in its affidavit that it is taking into account creditors' interests in a proposed scheme aimed at determining the optimal method for distributing users' assets.
Zettai disclosed that its liquid assets consist of $284 million in cryptocurrency, with an additional $12 million set aside for ongoing investigations, legal proceedings, and efforts to restructure its liabilities.
Ambar Warrick contributed to this report.
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