Bitcoin and ether are on way for their worst month this year, 10 per cent and nearly 6 per cent lower, respectively

Cryptocurrencies dropped with stocks Wednesday as investors were concerned about the debt ceiling and the Federal Reserve’s upcoming move.

Bitcoin declined more than 3 per cent to $26,207.42, as per Coin Metrics. Ether shed nearly the same amount and was changing hands at $1,787.17.

The move coincided with a decline in US equities. The Dow was around 300 points lower, while the S&P 500 and Nasdaq Composite shed nearly 1 per cent each.

On Wednesday, House Speaker Kevin McCarthy said debt ceiling discussions are still stuck on spending levels — with eight days to go until the US is at risk of a default. McCarthy also stated he thinks the negotiating teams could make headway Wednesday.

Markets opened quite lower after being lower considerably yesterday, so this could be a response to that, stated David Wells, Chief Executive Officer at Enclave Markets. Even though crypto is an international market, volumes rise somewhat during US trading hours, so at times big crypto moves are following big equities moves that are macro driven.

As investors monitor the ongoing debt ceiling discussions in Washington and Federal Reserve split on where to go with interest rate raises, bitcoin has started behaving like a risk asset once more, just as it was beginning to trade more in conjunction with gold earlier during 2023.

Bitcoin and ether are on way for their worst month this year, 10 per cent and nearly 6 per cent lower, respectively. Bitcoin is over 7 per cent lower for the quarter, after ending Q1 71 per cent higher. Ether is 1.8 per cent lower, after it posted a 52 per cent rise in the first quarter.