Bitcoin Faces Significant Outflows and Political Risk Amid Fading Fed Rate-Cut Hopes
Bitcoin Faces Significant Outflows and Political Risk Amid Fading Fed Rate-Cut Hopes
Crypto markets experienced substantial outflows, with Bitcoin leading the decline, amidst dimming hopes for Federal Reserve interest rate cuts. Bitcoin is also facing potential 'risk premia' due to a reported investigation into US Fed Chair Jerome Powell, raising concerns over political pressures. Separately, a major exchange, OKX, defended its decision to freeze user assets, citing strict KYC and AML obligations.
Bitcoin Sees Significant Outflows
Crypto funds experienced substantial outflows totaling $454 million last week, largely driven by Bitcoin which alone accounted for $405 million in withdrawals. This market reaction is attributed to fading hopes for Federal Reserve interest rate cuts, with US funds particularly affected, shedding $569 million. Despite this, some altcoins and European funds recorded modest inflows.
Political Scrutiny and Bitcoin's Risk Profile
Further uncertainty for Bitcoin emerges as analysts suggest that a reported probe into US Fed Chair Jerome Powell could introduce 'risk premia' for the cryptocurrency. This development is drawing attention to Bitcoin’s non-sovereign narrative, while simultaneously raising concerns over political pressure impacting broader markets.
Exchange Defends Asset Freezes Amid KYC Scrutiny
In related news concerning market infrastructure, OKX founder Star Xu publicly defended the exchange's decision to freeze $40,000 in stablecoins. The freeze occurred after a user admitted to purchasing verified accounts, with OKX emphasizing its commitment to strict Know Your Customer (KYC) and Anti-Money Laundering (AML) obligations.