Bitcoin extended its decline on October 27, breaking below the $80,000 to $87,000 range that had held for nearly a month. As of 13:43 Beijing time, Bitcoin was down 0.5% at $79,830.3.
The world's largest corporate Bitcoin holder, Strategy, paused its Bitcoin purchases last week, while market concerns that the Federal Reserve will signal a hawkish stance at this week's policy meeting further dampened crypto market sentiment.
Despite a pullback in international oil prices and an overnight rebound in US stocks driven by tech shares, Bitcoin failed to find meaningful support.
Strategy Skips a Week of Bitcoin Buying, Spends $205 Million on Preferred Stock Buyback
Strategy disclosed that during the week of October 19 to 25, the company neither bought nor sold any Bitcoin, nor did it raise funds by selling shares through its at-the-market (ATM) program.
As of October 25, Strategy held a total of 848,517 Bitcoins, with a cumulative acquisition cost of approximately $64.02 billion including fees and other related expenses, translating to an average purchase price of about $75,446 per coin.
However, the company still conducted capital allocation moves last week. Strategy tapped its US dollar cash reserves to repurchase 2,068,459 shares of its STRC series perpetual preferred stock for approximately $204.9 million, with no repurchases of other security classes.
STRC is Strategy's floating-rate Series A perpetual preferred stock. The company chose to buy back this class of securities rather than continue adding to its Bitcoin holdings.
Strategy did not explain the specific reason for pausing Bitcoin purchases, nor did it announce any change to its long-term Bitcoin holding strategy.
Because Strategy has long funded Bitcoin purchases through capital market financing, its accumulation has been viewed by some investors as an important source of market demand. The pause, combined with the company's sale of some Bitcoin earlier this year, has made the market more attentive to the pace of its future purchases.
Fed Expected to Hold Rates at 4%, Market Fears Hawkish Signals
Beyond Strategy's purchase pause, the Fed's upcoming rate decision is also a major factor pressuring Bitcoin's price.
The market widely expects the Fed to keep rates unchanged at 4.0% at the monetary policy meeting concluding this Wednesday. However, recent US inflation data has continued to show strong stickiness, fueling investor concerns that the Fed may hint at the need for further rate hikes ahead.
Higher rates typically raise the cost of capital and enhance the appeal of yield-bearing assets such as bonds, thereby weakening investors' willingness to allocate to highly volatile assets like Bitcoin.
Therefore, even if the Fed stays put this time, its signals on the future rate path could still affect the crypto market.
Meanwhile, the European Central Bank and the Bank of Japan will also announce monetary policy decisions this week. Markets expect both central banks may lean hawkish, further increasing uncertainty over the global liquidity outlook.
Notably, international oil prices have recently pulled back and overnight US stocks rose on the back of tech shares, but these developments failed to meaningfully improve crypto market sentiment. Bitcoin's drop below $80,000 means the lower bound of the range that had held for nearly a month has now been breached.
Cryptocurrencies Broadly Decline; Ripple's US Bank Charter Approval Lifts XRP Against the Trend
Most other major cryptocurrencies fell on Tuesday. Ethereum dropped 0.6% to $2,307.01; BNB declined 0.3%, Solana fell 1.2%, while Cardano edged up 0.4%.
XRP was one of the few major cryptocurrencies to rise against the trend, gaining about 0.7%. Earlier, Ripple received final approval from US regulators to establish a national trust bank, providing a new regulatory foundation for its business expansion.
Among meme coins, Dogecoin rose 0.6% and the Trump-themed token TRUMP gained 1.7%, but they failed to change the overall weakness in the crypto market.
Currently, Bitcoin faces two direct pressures: first, new purchase demand from large corporate buyers like Strategy has temporarily weakened; second, major central banks may continue to maintain relatively tight monetary policy.
For the market, whether the Fed signals further rate hikes this week, and whether Strategy resumes Bitcoin purchases afterward, will be key factors influencing short-term price movements.
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