Markets
Bitcoin Above $69,000 as Inflation Shows Signs of Easing Ahead of Fed Meeting
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2 months agoon
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adminU.S. prices rose modestly in June, suggesting cooling inflation that might allow the Federal Reserve to cut interest rates in September and provide a pathway for higher prices in risk assets, including crypto.
The Commerce Department reported on Friday that consumer spending slowed slightly last month. Easing price pressures and a cooling labor market may bolster Fed officials’ confidence that inflation is trending toward the central bank’s 2% target.
Data showed that the price index of personal consumption expenditures, the Fed’s preferred gauge for inflation, rose 0.1% last month after being unchanged in May. It also rose 2.5% compared to goods and services measured a year ago, data showed.
A cut to interest rates could help lift crypto asset prices as borrowing becomes cheaper for investors, with some analysts forecasting a Bitcoin price as high as $100,000 this year. The asset is trading for $69,200, according to CoinGecko data.
The Fed’s next policy meeting is set for July 30-31. The CME’s FedWatch tool, which considers Fed funds data by derivatives traders, shows a 95.5% chance of no rate cuts this month.
The probability for a 25 basis point cut in September, however, stands above 85%, with a further 14% tipped for an even larger cut.
Earlier this month, former President Donald Trump warned Fed Chairman Jerome Powell against politicizing rates ahead of the U.S. election, which could boost voter confidence over economic stewardship and help the Democrats retain the White House in November.
The former president and Republican nominee previously said the central bank would “maybe” cut interest rates ahead of the election before adding: “It’s something that they know they shouldn’t be doing.” Trump also said he wouldn’t kick Powell out of his job before his term ended, provided he was “doing the right thing.”
In any case, the timing of the U.S. election is placing additional pressure on the central bank to stick to its congressionally mandated objectives of remaining impartial.
Bitcoin, meanwhile, stands to benefit from a change of the guard in Washington, D.C., according to some industry experts.
“Bitcoin will spend the next four months highly correlated to the probability that Trump is elected,” Rich Rosenblum, co-founder of trading firm GSR, tweeted on Saturday.
Trump, speaking to a packed crowd of 20,000 people at the Bitcoin 2024 conference in Nashville on Saturday, said he would build a “strategic Bitcoin stockpile,” vowing to keep 100% of all the Bitcoin the U.S. government currently holds or acquires on home soil.
Despite Trump’s speech having little impact on Bitcoin’s price, the former president’s crypto policy promises have made it “impossible” for Vice President Kamala Harris to counter, Rosenblum tweeted.
That’s largely dependent on Harris’ policy being devoid of any language focusing on an overhaul to the Securities and Exchange Commission and government-held Bitcoin, the co-founder said.
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Bitcoin
Whales didn’t sell Bitcoin at $62k, on-chain data shows
Published
3 hours agoon
October 6, 2024By
adminBitcoin faces yet another correction after surpassing the $62,000 mark on Oct. 2. However, data shows that whales haven’t taken part in the latest selloff.
Bitcoin (BTC) consolidated around the $60,000 zone between Oct. 1 and 4 as the geopolitical tension between Iran and Israel heated up.
Right after the U.S. jobs report, the flagship cryptocurrency reached a local high of $62,370 on Oct. 5 as the broader crypto market witnessed bullish momentum.
Bitcoin declined by 0.2% in the past 24 hours and is trading at $61,950 at the time of writing. Its daily trading volume plunged by 53% and is currently hovering at $12.2 billion.
According to data provided by IntoTheBlock, large Bitcoin holders recorded a net inflow of 205 BTC on Oct. 5 as the outflows remained neutral. The on-chain indicator shows that whales didn’t sell Bitcoin as its price surpassed the $62,000 mark.
Meanwhile, Bitcoin’s whale transaction volume decreased by 48% on Oct. 5 — falling from $48 billion to $25 billion worth of BTC. Lower trading and transaction volumes usually hint at price consolidations and lower volatility.
Data from ITB shows that Bitcoin registered a net outflow of $153 million from centralized exchanges over the past week. Increased exchange outflows suggest accumulation as the bullish expectations for October rise.
It’s important to note that macroeconomic events and geopolitical tension can suddenly change the direction of financial markets, including crypto.
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AI Tokens Lead Crypto Rebound Amid Strong U.S. Economy
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2 days agoon
October 5, 2024By
adminBitcoin may have bottomed at $60,000 earlier this week, and the Fed easing into a strong economy points to more upside, Will Clement said.
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Markets
Bitcoin ‘Uptober’ Might Finally Be Getting Started—Here’s Why
Published
2 days agoon
October 4, 2024By
adminThe price of Bitcoin climbed higher Friday, rising over 3% to a daily high above $62,300 earlier after a blowout jobs report helped assuage fears of an imminent economic slowdown in the U.S.
The Bureau of Labor Statistics reported Friday that employers added 254,000 jobs in September, far surpassing economists’ expectations of 140,000 jobs gained. Meanwhile, employment data was revised up for July and August, painting a rosier picture of labor conditions that had supposedly weakened as the Federal Reserve began its easing campaign.
Friday’s data for September indicated that U.S. employers added the most jobs in a month since adding 310,000 in March. At the same time, the unemployment rate ticked down from 4.2% to 4.1%, coming in slightly below economists’ expectations while matching June’s unemployment figure.
While Bitcoin‘s price has cooled slightly to just above $62,000 at present, the price trend remains positive over the last day as Bitcoin starts to climb back after a rough dip to start October.
Leena ElDeeb, a research analyst at 21Shares, told Decrypt in a statement that Friday’s jobs reading is supportive of “risk assets,” such as stocks and crypto. Keeping the Federal Reserve’s easing campaign on track, she pointed to lower borrowing costs as a boon for Bitcoin’s price.
“Bitcoin and the longer tail of crypto assets are sensitive to labor market data because it influences the Fed’s decision on rate cuts, which in turn have a positive impact on Bitcoin as borrowing costs fall,” she said. “Therefore, we expect flows to start recovering following the escalation of geopolitical tensions that shook the market over the past week.”
Indeed, Bitcoin is trading hands 6% lower on the week, with markets rattled after missiles were launched at Israel from Iran.
After the episode put the so-called Uptober—a period of historic strength for Bitcoin’s price—on pause, BlackRock’s spot Bitcoin ETF saw outflows for only the fourth time on record Thursday as Bitcoin briefly dipped below the $60,000 mark, according to Bloomberg ETF analyst James Seyffart. And collectively, Bitcoin ETFs have marked three straight days of outflows to start the month.
As inflation has trended towards the Fed’s 2% target, policymakers have increasingly focused on labor market conditions. The concern is that interest rates recently lowered from a two-decade high could prove too restrictive in hindsight, tipping the economy into a recession.
Fed Chairman Jerome Powell poured cold water on the prospect of a jumbo-sized rate cut earlier this week. He said the U.S. central bank’s “base case” is two more rate cuts of 25 basis points through year’s end, after the Fed cut its benchmark rate by 50 basis points last month.
Faced with a strong labor reading, expectations of a 50 basis point cut were virtually erased, according to the CME Group’s FedWatch Tool. Falling from a 32% chance the day before, traders penciled in a 5% chance that the Fed would call for such an outsized move.
Friday’s labor market gauge could lead to short-term inflation fears because it was so strong, Grayscale Investment’s Managing Director of Research Zach Pandl told Decrypt in a statement. But he said a backdrop of strong economic growth could support Bitcoin’s price, especially amid growing chatter about government spending following November’s presidential election.
“Conversation about Fed rate cuts and debate about larger government deficits continue alongside solid economic growth, which should be net-positive for investors’ risk appetite,” he said. “Grayscale Research expects Bitcoin to benefit in this risk-positive environment.”
Edited by Andrew Hayward
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