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Bitcon and Ethereum prices fell 4% on Friday. Photo: Yuriko Nakao / Getty Images
The cryptocurrency market saw a minor decline on Friday morning, with bitcoin (BTC-USD) and ethereum (ETH-USD), the world’s first and second largest coins, down around 4%.
Bitcoin, which currently trades at $ 37,866 ($ 27,259), hit a level of $ 41,330 on June 15, a key resistance area of $ 41,250, but it has been steadily declining since.
This week, he was overturned by an announcement from the US Federal Reserve that it could raise interest rates by the end of 2023. Assets deemed risky, like some stocks and crypto, have also been weighed down by lingering concerns that the Fed may wind up its bond buying program sooner than expected.
Bitcoin has been on the decline in recent days. Chart: Yahoo Finance
On Thursday, the World Bank also rejected a request from El Salvador to help implement bitcoin as legal tender.
The bank said it couldn’t help El Salvador’s plans due to the environmental impact of bitcoin mining and the downsides of transparency.
It came as the UK’s Financial Conduct Authority (FCA) reiterated its warning that people should be prepared to lose all of their money if they invest in cryptocurrencies.
The regulator estimated that 2.3 million adults in Britain now hold cryptoassets, up from 1.9 million last year, with a growing number seeing them as a supplement or alternative to traditional investments.
Enthusiasm for crypto-assets is also increasing, with more than half of cryptocurrency users reporting having had a positive experience so far and are likely to buy more from 41% to 53%, a declared the FCA. Fewer people also regret buying cryptocurrencies, down from 15% to 11%.
Sheldon Mills, FCA executive director for consumers and competition, said: “The market has continued to grow and some investors have taken advantage of the higher prices.
Watch: What is bitcoin?
“However, it is important that customers understand that because these products are largely unregulated, if something goes wrong it is unlikely that they will have access to the FSCS or the Financial Ombudsman Service.
The story continues
Cryptos have recently been boosted by institutional support. Several organizations, including MicroStrategy (MSTR), have invested billions of dollars in cryptocurrencies and traditional financial firms like PayPal (PYPL) and Goldman Sachs (GS) have started to manage assets on behalf of clients.
While things may seem calm to the untrained, activity is still strong behind the scenes, said Paolo Ardoino, CTO at Bitfinex. Options markets are buzzing as institutions test their strategies.
He added: Bitcoin has become a staple in some of the most diverse wallets in the world. Long-term retail investors are riding the wave. The builders of Bitcoin continue to build. The first bitcoin upgrade in four years has been approved and will go into effect in November. The developers are working far ahead of the upgrade. The community continues to improve financial networks around the world. “
However, according to a Bank of America survey, 81% of fund managers say bitcoin is still a bubble.
Watch: What are the risks of investing in cryptocurrency?
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