Cryptocurrencies fell sharply late Wednesday and into Thursday, with bitcoin dropping below $25,000 and Polygon’s MATIC, and Cardano’s ADA extending 24-hour declines to as much as 9% and 8%, respectively. This comes following Wednesday’s Federal Reserve policy decision at which the central bank suspended rate hikes for at least one meeting, but signaled it expects further monetary tightening before the end of the year. Bitcoin could see further short-term losses, according to LMAX Digital’s morning note. “As per our technical insights in today’s update, any additional setbacks in the price of bitcoin should be well supported ahead of $22K.”

Paying interest on or surcharges for using a digital euro would be banned under a draft law seen by CoinDesk, and set to be proposed by the European Commission on June 28. The proposed central bank digital currency (CBDC) would have to be available for cash-style offline payments from day one, and users shouldn’t be able to program it to limit onward use, the leaked bill said. “The digital euro shall be available for both online and offline digital euro payment transactions as of the first issuance of the digital euro,” said the text viewed by CoinDesk. The level of privacy for offline, face-to-face use should be “comparable” to withdrawing banknotes at an ATM, it said.

The Middle Eastern arm of OKX, the second-largest cryptocurrency exchange by trading volume, has received an MVP Preparatory license from the Dubai Virtual Assets Regulatory Authority (VARA). OKX Middle East has already taken up residence in a new office in Dubai World Trade Center, and says it plans to expand the number of staff to 30, with a focus on local hires and senior management. Once the Minimal Viable Product (MVP) license becomes fully operational, OKX Middle East will provide spot, derivatives and fiat services, including U.S. dollar and United Arab Emirates dirham (AED) deposits, withdrawals and spot-pairs, the company said in a press release.

While bitcoin’s volatility has declined steadily since March, its relationship to traditional financial (TradFi) assets has been unpredictable. This unlikely pairing underscores the asset’s unique nature and a fundamental difference from more traditional assets.

Different narratives

Bitcoin has worn a number of narratives in recent years. An initial “hedge against dollar inflation” narrative led to a “high beta tech stock” story, which now has morphed into bitcoin as an “uncorrelated financial asset.”

On a day where the Federal Open Market Committee (FOMC) left interest rates unchanged, both bitcoin and ether continued to decouple from traditional financial assets. BTC and ETH are down more than 4% and 7%, respectively, month-to-date, while the S&P 500 and Nasdaq Composite Index have each risen more than 4% over the identical time period.

- Omkar Godbole