Bitcoin extended its weekly decline on Wednesday as concerns about high U.S. interest rates and weakening investor demand continued to weigh on the cryptocurrency market.
The world’s largest cryptocurrency slipped 0.2% to $62,778.20 by 02:05 ET, or 06:05 GMT. The decline left Bitcoin trading close to its annual lows, with buyers showing little urgency to enter the market.
Technology Stock Sell-Off Hurts Risk Appetite
Heavy losses across technology and semiconductor stocks made investors more cautious toward risk-sensitive assets.
Although some investors moved away from highly valued technology companies, cryptocurrencies received little benefit from that rotation. Instead, capital appeared to flow toward sectors offering clearer earnings prospects and more established fundamentals.
Artificial intelligence-related equities have attracted increased attention in recent weeks. As a result, crypto assets have faced stronger competition for speculative investment capital.
Federal Reserve Rate Fears Pressure Bitcoin
Investors remain concerned that U.S. interest rates could stay elevated for longer than previously expected.
Hawkish signals from the Federal Reserve’s latest meeting strengthened those concerns and reduced demand for riskier investments, including Bitcoin and other cryptocurrencies.
Markets are now waiting for the upcoming Personal Consumption Expenditures price index. The PCE inflation report could provide additional clues about the Federal Reserve’s future interest-rate policy.
A stronger-than-expected inflation reading could increase pressure on Bitcoin. However, softer inflation data may revive expectations for lower interest rates and improve crypto market sentiment.
Bitcoin ETF Outflows Continue
Bitcoin has remained trapped within a narrow trading range over the past week. The cryptocurrency continues to hover slightly above its annual lows due to a lack of positive market catalysts.
Ongoing withdrawals from spot Bitcoin exchange-traded funds have added to the selling pressure. These funds are now heading toward their seventh consecutive week of net outflows.
Although the pace of withdrawals has slowed, investors have seen few signs of a meaningful return to sustained inflows. Continued ETF outflows suggest that institutional demand for Bitcoin remains weak.
CLARITY Act Could Support Coinbase
Bank of America maintained its “Buy” rating on Coinbase Global, arguing that upcoming U.S. cryptocurrency legislation could become a major catalyst for the exchange operator.
According to the bank, the proposed CLARITY Act could strengthen Coinbase’s position as a leading U.S. partner for traditional financial institutions seeking exposure to blockchain technology and digital assets.
Bank of America also highlighted Coinbase’s recent approval, alongside Kalshi, to introduce perpetual futures products in the United States.
The global perpetual futures market is estimated to be three to four times larger than the spot cryptocurrency market. Access to this sector could therefore provide Coinbase with a significant new source of trading volume and revenue.
Regulatory Delays Create Uncertainty
The passage of the CLARITY Act could provide a near-term boost to crypto trading activity and Coinbase’s financial performance.
A more supportive regulatory environment under the Trump administration may also benefit the broader cryptocurrency industry.
However, efforts to advance the bill through Congress have stalled in recent weeks. Cryptocurrency and banking lobbyists remain divided over stablecoin rules and the ability of companies to offer yield payments.
These disagreements could delay regulatory clarity and limit the legislation’s immediate impact on the market.
Ethereum and Altcoins Trade Lower
Major altcoins also moved lower on Wednesday as traders found few reasons to increase their market exposure.
Ethereum, the world’s second-largest cryptocurrency, fell 1% to $1,675.73. XRP declined 0.9%, while Solana and BNB recorded smaller losses.
Cardano underperformed several major cryptocurrencies, falling 2.2%.
Memecoins also faced selling pressure. Dogecoin declined 1.4%, while the Official Trump token dropped 2.1%.
The broader weakness suggests that investors remain cautious across the cryptocurrency market as they assess inflation risks, interest-rate expectations and institutional fund flows.
