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Bitcoin Drops to New Two-month Low as World Markets Sell Off

File photo: Physical imitation of Bitcoins are pictured at a cryptocurrency exchange branch near the Grand Bazaar in Istanbul on October 20, 2021, a day after Bitcoin took another step closer to mainstream investing with the launch of a new security on Wall Street tied to futures of the cryptocurrency. Ozan Koze, AFP archive
File photo: Physical imitation of Bitcoins are pictured at a cryptocurrency exchange branch near the Grand Bazaar in Istanbul on October 20, 2021, a day after Bitcoin took another step closer to mainstream investing with the launch of a new security on Wall Street tied to futures of the cryptocurrency. Ozan Koze, AFP archive
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Bitcoin Drops to New Two-month Low as World Markets Sell Off

File photo: Physical imitation of Bitcoins are pictured at a cryptocurrency exchange branch near the Grand Bazaar in Istanbul on October 20, 2021, a day after Bitcoin took another step closer to mainstream investing with the launch of a new security on Wall Street tied to futures of the cryptocurrency. Ozan Koze, AFP archive
File photo: Physical imitation of Bitcoins are pictured at a cryptocurrency exchange branch near the Grand Bazaar in Istanbul on October 20, 2021, a day after Bitcoin took another step closer to mainstream investing with the launch of a new security on Wall Street tied to futures of the cryptocurrency. Ozan Koze, AFP archive

Top cryptocurrency bitcoin hit a fresh two-month low on Friday, breaking out of its recent tight range as a wave of risk averse sentiment swept through world markets.
On Thursday, bitcoin fell 7.2% in its biggest one-day drop since November 2022 when top exchange FTX collapsed.
It then slipped to a two-month low of $26,172 during Asian trading hours on Friday, its lowest since June 16. By 0835 GMT, it had partly recovered to $26,441, down 0.8% on the day, Reuters said.
Global markets have been hit by a wave of selling, with Wall Street's main indexes closing lower on Thursday and Asian shares heading for a third week of losses over concerns about China's economy and fears that US interest rates would stay higher for longer given a resilient economy.
Ether, the second biggest cryptocurrency, was steady at $1,685.20, having also dropped sharply on Thursday.
Some analysts attributed crypto's drop to a Wall Street Journal report that Elon Musk's SpaceX sold its bitcoin holdings after writing the value down by $373 million. Musk is influential among crypto enthusiasts, and bitcoin prices have previously moved in response to his tweets.
The SpaceX report was the "immediate catalyst" for bitcoin's sell-off, said Ben Laidler, global markets strategist at eToro.
"The broader driver is that crypto assets are not immune to the deepening risk-off selling pressure seen across all asset classes," Laidler added.
Joseph Edwards, head of research at Enigma Securities, attributed the bitcoin price move to low volatility and a lack of enthusiasm from retail investors.
Bitcoin had been hovering close to $30,000 in recent months, having gradually recovered this year after dropping sharply in 2022 when various crypto firms collapsed, leaving investors with large losses.
Crypto markets were boosted in June by BlackRock applying to launch a spot bitcoin exchange-traded fund (ETF) in the United States. Some investors interpreted that move as an indication that the US Securities and Exchange Commission would approve spot bitcoin ETF applications from various asset managers, including Grayscale.
"The big concern right now is that this might be a frontrun on the outcome of Grayscale's lawsuit against the SEC; optimism on that front has been keeping markets inflated above whether they might otherwise be for much of the summer," Edwards said.

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US Economy Grew at Solid 3% Rate Last Quarter, Government Says in Final Estimate

FILE - The New York Stock Exchange, at rear, is shown on Sept. 24, 2024, in New York. (AP Photo/Peter Morgan, File)
FILE - The New York Stock Exchange, at rear, is shown on Sept. 24, 2024, in New York. (AP Photo/Peter Morgan, File)
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US Economy Grew at Solid 3% Rate Last Quarter, Government Says in Final Estimate

FILE - The New York Stock Exchange, at rear, is shown on Sept. 24, 2024, in New York. (AP Photo/Peter Morgan, File)
FILE - The New York Stock Exchange, at rear, is shown on Sept. 24, 2024, in New York. (AP Photo/Peter Morgan, File)

The American economy expanded at a healthy 3% annual pace from April through June, boosted by strong consumer spending and business investment, the government said Thursday, leaving its previous estimate unchanged.
The Commerce Department reported that the nation's gross domestic product — the nation's total output of goods and services — picked up sharply in the second quarter from the tepid 1.6% annual rate in the first three months of the year, The Associated Press reported.
Consumer spending, the primary driver of the economy, grew last quarter at a 2.8% pace, down slightly from the 2.9% rate the government had previously estimated. Business investment was also solid: It increased at a vigorous 8.3% annual pace last quarter, led by a 9.8% rise in investment in equipment.
The final GDP estimate for the April-June quarter included figures showing that inflation continues to ease, to just above the Federal Reserve’s 2% target. The central bank’s favored inflation gauge — the personal consumption expenditures index, or PCE — rose at a 2.5% annual rate last quarter, down from 3% in the first quarter of the year. Excluding volatile food and energy prices, so-called core PCE inflation grew at a 2.8% pace, down from 3.7% from January through March.
The US economy, the world's biggest, displayed remarkable resilience in the face of the 11 interest rate hikes the Fed carried out in 2022 and 2023 to fight the worst bout of inflation in four decades. Since peaking at 9.1% in mid-2022, annual inflation as measured by the consumer price index has tumbled to 2.5%.
Despite the surge in borrowing rates, the economy kept growing and employers kept hiring. Still, the job market has shown signs of weakness in recent months. From June through August, America's employers added an average of just 116,000 jobs a month, the lowest three-month average since mid-2020, when the COVID pandemic had paralyzed the economy. The unemployment rate has ticked up from a half-century low 3.4% last year to 4.2%, still relatively low.
Last week, responding to the steady drop in inflation and growing evidence of a more sluggish job market, the Fed cut its benchmark interest rate by an unusually large half-point. The rate cut, the Fed’s first in more than four years, reflected its new focus on shoring up the job market now that inflation has largely been tamed.
Some other barometers of the economy still look healthy. Americans last month increased their spending at retailers, for example, suggesting that consumers are still able and willing to spend more despite the cumulative impact of three years of excess inflation and high borrowing rates. The nation’s industrial production rebounded. The pace of single-family-home construction rose sharply from the pace a year earlier.
And this month, consumer sentiment rose for a third straight month, according to preliminary figures from the University of Michigan. The brighter outlook was driven by “more favorable prices as perceived by consumers” for cars, appliances, furniture and other long-lasting goods.
A category within GDP that measures the economy’s underlying strength rose at a healthy 2.7% annual rate, though that was down from 2.9% in the first quarter. This category includes consumer spending and private investment but excludes volatile items like exports, inventories and government spending.
Though the Fed now believes inflation is largely defeated, many Americans remain upset with still-high prices for groceries, gas, rent and other necessities. Former President Donald Trump blames the Biden-Harris administration for sparking an inflationary surge. Vice President Kamala Harris, in turn, has charged that Trump’s promise to slap tariffs on all imports would raise prices for consumers even further.
On Thursday, the Commerce Department also issued revisions to previous GDP estimates. From 2018 through 2023, growth was mostly higher — an average annual rate of 2.3%, up from a previously reported 2.1% — largely because of upward revisions to consumer spending. The revisions showed that GDP grew 2.9% last year, up from the 2.5% previously reported.
Thursday’s report was the government’s third and final estimate of GDP growth for the April-June quarter. It will release its initial estimate of July-September GDP growth on Oct. 30.