Bitcoin dropped 2% to $64,200 as corporations shift focus from crypto to AI, raising concerns about future liquidations.
Bitcoin fell by 2% on Monday, bringing its price down to approximately $64,200. This decline is linked to a trend where companies that once supported Bitcoin are now pivoting towards artificial intelligence, as noted by Alex Kuptsikevich, chief market analyst at FxPro.
The wider cryptocurrency market mirrored this sentiment, also dropping 2% to around $2.18 trillion, with a significant number of cryptocurrencies losing value compared to those that gained.
Notably, firms that had previously backed cryptocurrencies, including institutional holders and miners like Marathon Digital Holdings, are now rebranding to focus on AI data centers.
Kuptsikevich pointed out that institutional investors are beginning to pull back from Bitcoin, seeking to improve liquidity or explore new investment avenues. This shift in corporate interest raises concerns about potential Bitcoin liquidations in the near future.
Historically, retail investors tend to enter the market late, often at a loss, while corporations initially embraced crypto to enhance their public image. As these firms exit the space, Kuptsikevich suggests Bitcoin might revert to its retail investor base, a transition that could be challenging for current holders.
Presently, Bitcoin is hovering just above its 50-day moving average, a level that has shown stability for the past three weeks. Market watchers are encouraged to keep an eye on whether this support level can be maintained.
