Bitcoin remained below the key $60,000 level on Friday as investors continued withdrawing money from spot Bitcoin exchange-traded funds.
Concerns about higher U.S. interest rates and a wider decline in risk assets also weighed on the cryptocurrency market.
Bitcoin fell 2.7% to approximately $59,918 by 01:57 ET. The world’s largest cryptocurrency was heading for a weekly decline of nearly 7%.
Bitcoin ETF Outflows Continue for Seventh Week
Spot Bitcoin ETFs recorded their seventh consecutive week of net outflows, according to data from SoSoValue.
Investors withdrew approximately $1.35 billion from the funds during the week. The pace of withdrawals accelerated again following a brief slowdown over the previous two weeks.
The continued Bitcoin ETF outflows suggest that both institutional and retail investors remain cautious about the cryptocurrency market.
Persistent economic uncertainty, high interest rates and limited positive catalysts have encouraged investors to reduce their exposure to speculative assets.
Investors Shift Toward AI Stocks
Many investors have increasingly preferred assets with more visible earnings and business fundamentals.
Artificial intelligence stocks have attracted significant interest in recent years as optimism surrounding the technology continues to grow. The sector has also delivered stronger returns than many cryptocurrencies during that period.
Although the AI stock rally experienced some weakness during the week, the decline did not lead to a noticeable increase in cryptocurrency demand.
Instead, traders remained cautious across both equity and digital asset markets.
Federal Reserve Concerns Pressure Bitcoin
Expectations that U.S. interest rates could remain high for longer also placed pressure on Bitcoin and other cryptocurrencies.
The Federal Reserve adopted a more hawkish position during its latest policy update, increasing concerns about additional monetary tightening.
U.S. personal consumption expenditures inflation data released on Thursday showed that price pressures remained persistent and above the Federal Reserve’s 2% annual target.
Continued inflation could encourage the central bank to keep borrowing costs elevated or consider further interest rate increases.
Why Higher Interest Rates Hurt Crypto
Higher interest rates are generally viewed as negative for speculative assets such as Bitcoin.
Cryptocurrencies do not provide investors with a direct yield. Therefore, they can become less attractive when government bonds, savings products and other lower-risk investments offer stronger returns.
High borrowing costs can also reduce market liquidity and discourage investors from taking risks.
As a result, expectations for tighter monetary policy often create downward pressure across the cryptocurrency market.
Binance Fails to Secure EU Crypto Licence
The market also faced regulatory uncertainty after Binance reportedly failed to obtain a crypto licence in Greece.
The licence would have allowed the world’s largest cryptocurrency exchange to continue operating across Europe under the European Union’s new regulatory framework.
Binance said customers would continue to have access to their assets. The company also plans to seek authorisation in another EU member state.
MiCA Rules Reshape Europe’s Crypto Industry
Under the European Union’s Markets in Crypto-Assets regulation, commonly known as MiCA, cryptocurrency companies must obtain authorisation from an EU member state.
Approved companies can then use the licence as a passport to provide services across the wider bloc.
European regulators introduced MiCA to create consistent rules for cryptocurrency businesses and improve investor protection.
The framework also aims to reduce potential financial risks associated with poorly regulated crypto exchanges.
Binance’s BNB token fell around 2% on Friday following the latest developments.
Ether and Major Altcoins Decline
The wider cryptocurrency market also traded lower as investors found few reasons to increase their exposure.
Ether, the second-largest cryptocurrency by market value, dropped 6.4% to approximately $1,548. The decline pushed Ether close to its lowest level in 14 months.
XRP slipped 0.3%, while Solana and Cardano each declined by more than 4%.
Meme cryptocurrencies also came under pressure. Dogecoin fell 3.5%, while the TRUMP token declined by approximately 2.9%.
Crypto Market Outlook Remains Uncertain
Bitcoin’s ability to recover above $60,000 could depend on a slowdown in ETF withdrawals and signs that U.S. inflation is moving lower.
Investors will also closely monitor future Federal Reserve decisions, institutional demand and regulatory developments in Europe.
Until those conditions improve, Bitcoin and the broader cryptocurrency market may remain vulnerable to additional selling pressure.
