The prospect of higher and longer interest rates is putting pressure on the cryptocurrency marketMissionbingoBitcoin recorded its biggest monthly decline since the collapse of Sam Bankman-Fried 's FTX empire in November 2022.

The world's largest digital asset tumbled nearly 16 per cent in April after the frenzy for spot bitcoin exchange-traded funds (ETF) in the US subsided after pushing the token to a record high of nearly $74000 in March.

Bitcoin and Ethernet coin ETF, launched in Hong Kong on Tuesday, also failed to generate momentum. The total first-day trading volume of the six products totaled $12.7 million, which is considerable locally, but below the $4.6 billion turnover of US products when they were launched in January, according to industry research.

Postpone interest rate cut

There is growing reason for the Fed to signal a delay in interest rate cuts after Wednesday's policy meeting, with the latest data, including rising labour costs, adding to inflationary pressures in the US. Real yields, seen as the true cost of capital for borrowers, are soaring, a difficult backdrop for speculative assets such as digital tokens.

The recent rise in Treasury yields and real interest rates is "toxic for gold, bitcoin and US stocks," Chris Weston, head of Pepperstone Group research, wrote in a report.

Bitcoin was trading at $60200 at 9:05 Singapore time on Wednesday, recovering only a fraction of the nearly 5 per cent drop in the previous session. Smaller tokens, such as etheric coins and popular dog coins on social media, have also been hit hard before.