Bitcoin experienced a slight slip in price on Monday, following a rebound from bear market territory over the weekend, as investor confidence remained tempered amidst heightened speculation surrounding potential U.S. interest rate adjustments.
The primary catalyst for Bitcoin‘s resurgence over the weekend was a significant decline in the value of the dollar, triggered by weaker-than-anticipated nonfarm payrolls data. This resurgence allowed the cryptocurrency to recover from its recent dip to approximately $59,000, marking a decline of roughly 22% from its peak in March.
As of 13:55 ET (18:55 GMT), Bitcoin had fallen by 1.35% in the past 24 hours, settling at $63,183.0.
The optimism surrounding Bitcoin’s price was partially fueled by increasing expectations of a 25 basis point interest rate cut by the Federal Reserve in September. Such a scenario is favorable for cryptocurrencies, which tend to perform well in environments characterized by low interest rates and ample liquidity.
While a cooling labor market provides impetus for the Federal Reserve to consider interest rate cuts, recent data follows a string of five consecutive months of stronger-than-expected payrolls readings. Additionally, inflation, a pivotal factor for the Fed, remains comfortably above the central bank’s annual target of 2%.
Despite the weekend’s recovery, Bitcoin continued to trade within a range observed throughout much of March and April, fluctuating between $60,000 and $70,000, amid diminishing enthusiasm surrounding the cryptocurrency market.
Furthermore, capital flows into Bitcoin investment products, particularly spot exchange-traded funds approved earlier in the year, have significantly slowed over the past month, with Bitcoin ETFs experiencing capital outflows for the past three weeks.
In the broader cryptocurrency market, major cryptocurrencies demonstrated mixed performance on Monday, reflecting the prevailing uncertainty. Ethereum, the second-largest cryptocurrency, experienced a 2.1% decline to $3,075.92, while XRP rose by 6.45% and Solana increased by 3.9%.
Bitcoin continued to exert considerable influence over cryptocurrency valuations, accounting for nearly 55% of the total cryptocurrency market valuation.
In parallel developments, recent findings reported by Bloomberg News, citing data from Visa and Allium Labs, revealed that less than 10% of stablecoin transaction volumes are organic or originate from genuine users. The analysis, which excluded transactions from automated bots and large-scale traders, highlighted that only $149 billion of the approximately $2.2 trillion in transactions in April stemmed from authentic payments activity.
Despite the prevalence of bots and large-scale traders, the stablecoin market, currently valued at around $150 billion, is predominantly led by Tether (USDT) and USD Coin (USDC), which collectively account for 97% of the market share.
In response to the findings, Visa noted the complexity of blockchain networks and acknowledged the diverse range of use cases for stablecoins, emphasizing the necessity to differentiate transactions initiated by end-users from those facilitated by automated systems.
Despite the gap between total transfer volume and bot-adjusted volume, the report highlighted consistent growth in monthly active stablecoin users, reaching 27.5 million across all blockchain networks.
