Bitcoin was last trading at just over $68,700. The market environment for this digital currency—which is considered very risky—has become more challenging. In addition to the recent turmoil in the technology sector, it is suffering in particular from expectations of further interest rate hikes by the Federal Reserve.
That would be bad news for Bitcoin investors, since the cryptocurrency does not pay interest. Instead, interest-bearing investments such as bonds become more attractive when interest rates rise.
In addition, the political tailwind for the crypto industry has slowed somewhat after the Democrats secured a majority in both chambers of Congress in the U.S. midterm elections early last week. This could lead to stricter regulatory oversight in the new year. As recently as August, the crypto industry had experienced a veritable boom.
