Headline: Crypto Markets Mixed Amidst Fed Rate Cut Hopes and Trade Tensions
Quick hits
- Bitcoin hovers around $93,300 after a dip to $91,800.
- US stocks surge as investors bet on rate cuts.
- Spot Bitcoin ETFs attract $1.8B inflows in two days.
Swimming Through the Scene
Stocks Ascend Disregarding Increasing Anticipation of Rate Reductions in Bitcoin Market
Despite a sunny day for US stocks, driven by hopes of lower interest rates and Trumph's latest trade chatter, the crypto market remained murky on Thursday. Bitcoin, the leading cryptocurrency, took a dip to $91,800 before rebounding and settling around $93,300. Meanwhile, Ethereum dipped 1.8% to $1,760, while Solana climbed a modest 1% to $151.
In an interview with CNBC's Squawk Box, Beth Hammack, President of the Federal Reserve Bank of Cleveland, hinted at preemptive rate cuts. The central bank, Hammack stated, would be proactive in adjusting rates when it becomes apparent that Trump's trade policies are impacting the US economy.
On Wall Street, the S&P 500 and tech-heavy Nasdaq soared by 2% and 2.6% respectively, according to Yahoo Finance. Despite these gains, both indices are still below their opening prices from April 2, when Trump announced his new round of tariffs. Bitcoin, in contrast, has been on an upward trajectory since then.
While some economists are fearful of escalating tariffs leading to inflation, the Consumer Price Index has shown soft figures recently. Trump's claims of prices "trending so nicely downward" may suggest the Fed might be moving too slowly to traders' liking, as hinted in a post on Truth Social. CME FedWatch now shows a 45% chance of two rate cuts by July, compared to 40% a day ago. The odds of the Fed holding rates steady have fallen to 9%.
Meanwhile, inflows into spot Bitcoin ETFs have hit $1.8 billion in the last two days according to CoinGlass, the highest two-day total since Jan 3-4. Valentin Fournier, lead research analyst at BRN, suggests this disconnect between ETF inflows and stagnant Bitcoin price suggests institutional buying could be offset by profit-taking and reduced retail activity.
As the White House pushes for a trade deal with China, Trump took to Truth Social to needle Boeing, urging the company to default China for refusing to purchase planes.
Daily Debrief Newsletter
Oh, and by the way, did you know...?- While the potential for preemptive rate cuts makes an uncertain economic outlook, its influence on Bitcoin and other cryptocurrencies can be more complex. Potential outcomes include increased volatility, perceptions of Bitcoin as a safe haven asset, and weakening dollar affecting cryptocurrency appeal. Read more
- The crypto market remained mixed on Thursday, even as US stocks surged, with Bitcoin hovering around $93,300 after a dip to $91,800.
- Ethereum dipped 1.8% to $1,760, while Solana climbed a modest 1%, illustrating the varying fortunes of altcoins.
- Beth Hammack, President of the Federal Reserve Bank of Cleveland, hinted at preemptive rate cuts, suggesting the central bank would be proactive in adjusting rates as Trump's trade policies impact the US economy.
- While some economists fear escalating tariffs leading to inflation, the Consumer Price Index has shown soft figures recently, with Trump's claims of prices "trending so nicely downward."
- CME FedWatch now shows a 45% chance of two rate cuts by July, compared to 40% a day ago, indicating a shifting perception among traders about the Fed's stance.
- Inflows into spot Bitcoin ETFs have hit $1.8 billion in the last two days, according to CoinGlass, suggesting institutional buying could be offset by profit-taking and reduced retail activity.
- Despite the gains in US stocks, both the S&P 500 and Nasdaq are still below their opening prices from April 2, while Bitcoin has been on an upward trajectory since then.
- As the White House pushes for a trade deal with China, Trump took to Truth Social to needle Boeing, urging the company to default China for refusing to purchase planes.
- The potential for preemptive rate cuts could have complex implications for Bitcoin and other cryptocurrencies, with increased volatility, perceptions of Bitcoin as a safe haven asset, and weakening dollar affecting their appeal. Read more
