Bitcoin slides amid uncertainty over interest rate cuts. Here’s why ‘Uptober’ will never happen

What happened to “Uptober?”

The price of Bitcoin (BTCUSD) continued its decline on Thursday, and altcoins including Ethereum (ETHUSD) and Solana (SOLUSD) fell further – which may disappoint those anticipating October gains by tomorrow. The world’s most popular cryptocurrency is now worth just under $107,000, down more than 6% so far this month — and 15% from its record high on October 6 — while Ethereum and Solana are both down about 10% in October.

The decline could highlight broader risk-off sentiment fueled by concern over the Federal Reserve’s plans for future interest rate cuts, after Fed Chair Jerome Powell said yesterday that another cut in December was “far from being” guaranteed.

This “prompted traders to reduce their expectations,” said Fugar Oseizade, COO of cryptocurrency exchange Bitgate. Investopedia. Inflows from U.S.-listed bitcoin and ethereum exchange-traded funds, including Fidelity Wise Origin Bitcoin Trust (FBTC) and ARK 21Shares Bitcoin ETF (ARKB), showed “signs of investor caution,” as they collectively saw outflows of $550 million as of Oct. 29, he said.

Cryptocurrency markets have already taken a hit after a Black Friday-like event on October 10, when more than $19 billion were wiped out of cryptocurrency positions. Weeks later, two digital asset treasury companies, or DATCOs, said they were selling the cryptocurrencies in their inventory just months after acquiring them.

ETHZilla (ETHZ), a former biotech company focused on storing ether, in August sold nearly $40 million of its treasury to fund stock buybacks, the company revealed Monday. The company’s CEO said in a statement that the company plans to continue this path with the aim of reducing the number of available shares as well as reducing the gap between its share price and the net asset value of its underlying holdings.

Some of DATCO’s most popular stocks including Tom Lee’s BitMine Immersion Technologies (BMNR), Eightco Holdings (ORBS), and SharpLink Gaming (SBET) have fallen sharply from their peak, down at least 70%.

When DATCO shares began trading at a discount to its cryptocurrency holdings, which would hamper its ability to continue financing its securities, there was some concern that it would trigger a broader wave of selling. Weakness in DATCOs led to some volatility in parts of the market, but there is no evidence it sparked a sell-off, according to Zad.

He added: “There are greater forces at play.”