Bitcoin Hits 3-Month Low

Bitcoin fell to a three-month low, dropping as much as 3% to $73,100, as hotter-than-expected US inflation and expectations of further interest rate hikes weighed on demand for riskier assets. The decline brings its losses this year to around 17%.

Bitcoin fell below $76,600 on Thursday, reaching its lowest level in around eight weeks as a sharp selloff in technology stocks spread to other risk-sensitive assets, further weakening sentiment across cryptocurrency markets. The Nasdaq 100 plunged, led by semiconductor companies facing disappointing earnings outlooks and concerns that Democratic control of Congress could bring tighter regulation of the artificial intelligence industry. These developments have increased investor caution towards technology-related investments, spilling over into digital assets. Meanwhile, cryptocurrencies are already facing industry-specific headwinds, including the fallout from the Binance hack and fading retail investor interest. The renewed volatility in technology shares has added to these pressures, offsetting the potential support from easing US Treasury yields, which would normally improve the appeal of speculative assets.

Bitcoin fell toward $76,000 on Wednesday, reaching its lowest level since mid-September, as early US midterm election results pointed to potential Democratic gains in Congress. This raised uncertainty over the outlook for crypto-related legislation, as a Democratic takeover could complicate efforts to advance industry-backed measures, including the Clarity Act, and alter the regulatory priorities of Congress. The cryptocurrency also remained under pressure from lingering fallout from last week's $6.3 billion Binance hack and subdued retail demand amid the growing appeal of artificial intelligence investments. Bitcoin has now lost around 6% over the past week. Meanwhile, US-listed spot Bitcoin ETFs saw more than $1 billion in outflows on Friday and Monday as investors increased downside protection ahead of the elections.