Capital is shifting into digital dollars as bitcoin wiltsCapital is shifting into digital dollars as bitcoin wilts The big news of the past 24 hours is that the Fed, the world’s most powerful central bank, is unlikely to provide a meaningful bullish catalyst in the near term, and markets are reacting negatively.
As sentiment weakens, capital is flowing not just out of altcoins but also out of bitcoin BTC$69,257.20 and into stablecoins, which are essentially tokenized versions of the U.S. dollar.
The Fed on Wednesday kept U.S. interest rates unchanged, explicitly warned of a high degree of uncertainty and offered no hints on what the inflation-activity balance could look like following the Iran war-led oil price spike.
Bitcoin dipped below $70,000 early today and is now down 1% since midnight UTC, extending the decline from nearly $76,000 earlier this week. The CoinDesk 20 Index and major tokens such as ether (ETH), solana (SOL) and XRP (XRP) are following BTC's lead.
Bitcoin's dominance also dropped, falling to 58.7% from 59.4% in three days. In other words, its share of the total crypto market has declined with the price, a sign that even the largest cryptocurrency is seeing capital outflows. Traditionally, its share would rise during market slides as investors rotated into BTC from alternative cryptocurrencies, or altcoins.