Bitcoin and other cryptocurrencies declined sharply on Wednesday as investors reacted to a lack of clarity from the Federal Reserve regarding future interest rate policy and escalating geopolitical tensions. The price of Bitcoin fell below $70,000, continuing a downward trend that began earlier in the week, while capital flowed into stablecoins.
The Fed on Wednesday held interest rates steady but offered no guidance on when it might initiate to cut rates, citing continued uncertainty about inflation and economic activity. This ambiguity, coupled with rising oil prices following concerns about disruptions in the Strait of Hormuz, prompted a risk-off sentiment in financial markets.
Bitcoin’s dominance, a measure of its market share relative to other cryptocurrencies, decreased to 58.7% from 59.4% over the past three days, according to data analyzed by Nansen. This suggests that even the largest cryptocurrency is experiencing capital outflows, a reversal of the typical pattern during market downturns where investors often move funds into Bitcoin. Instead, investors are shifting assets into stablecoins, which are pegged to the value of the U.S. Dollar.
The market share of Tether (USDT), the leading dollar-linked token, increased from 7% to 7.76% of the total cryptocurrency market capitalization, while USD Coin (USDC) rose from 3% to 3.35%, indicating a preference for the relative safety of dollar equivalents. “Capital is moving selectively,” said Nikolai Sondergaard, a research analyst at Nansen, in an email. “Central banks are no longer a direct bullish catalyst for crypto and institutional inflows are supporting the core of the market rather than the broader risk curve.”
Traditional markets also reflected the increased risk aversion. The dollar index rose above 100, while S&P 500 futures declined. Gold and silver futures also fell, with gold down 2.73% to $2,168.99 and silver down 5.03% to $71.55.
Several economic indicators are scheduled for release on Thursday, including weekly jobless claims, the Philadelphia Federal Reserve Manufacturing Index, and latest home sales data. The Federal Reserve’s balance sheet data for the week ending March 18 will also be released.
In the crypto space, Cratos DAO is voting on extending the current mobile app reward criteria deadline to April 30, 2026.
As of 4 p.m. Eastern Time on Wednesday, Bitcoin was trading at $70,240.69, down 0.94% for the day, and 4.92% over the past 24 hours. Ethereum was down 0.3% at $2,177.57, with a 24-hour decline of 5.85%. The CoinDesk 20 Index fell 0.11% to 2,055.04, down 4.66% over 24 hours.
Coinbase Global (COIN) closed at $202.29, down 3.78%, and was trading down 0.94% in pre-market at $200.38. MicroStrategy (MSTR) closed at $140.56, down 6.47%, and was down 0.89% in after-hours trading at $139.31.
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