Markets
Approval of Spot Ether Assured ETF Fails to Shake Falling Crypto Market
Cryptocurrency markets remained under pressure during U.S. trading on Thursday, extending a decline that began the day before when the Federal Reserve indicated it expected to cut rates just once this year.
Ether (ETH) saw a mid-morning rally after U.S. Securities and Exchange Commission Chairman Gary Gensler, during a Senate hearing, stated that he anticipated that spot ether ETFs would receive full approval from his agency by the end of summer. This news briefly lifted Ether by 1%, but the gain was short-lived. The price reversed more than 3% in an hour and was trading at $3,440 at press time, down 5% in the last 24 hours. The broader CoinDesk 20 index fell 4.9% over the same period.
Bitcoin (BTC) also fell nearly 5%, trading near a one-week low of $66,300.
Markets turned negative on Wednesday afternoon following the Federal Reserve’s aggressive policy meeting. The U.S. central bank kept the federal funds benchmark rate range stable at 5.25% to 5.50%, but updated its forecasts to suggest just a 25 basis point rate cut in 2024. In contrast, the Rate futures markets were forecasting two to three 25 basis point cuts. this year.
US economic data released on Thursday morning, indicating a continued slowdown in both inflation and the economy, failed to improve the macro mood in cryptocurrencies. The Producer Price Index (PPI) for May fell 0.2%, against expectations for a 0.1% increase. On an annual basis, PPI rose 2.2%, compared to forecasts of 2.5%. Additionally, initial claims for unemployment benefits rose to a near one-year high of 242,000 versus expectations of 225,000.
“$66K looks like equilibrium,” said respected analyst Skew in a post on X, who, along with others, is trying to decipher a market that has not sustained higher levels despite recent upbeat news. These include improving inflation data, a Bitcoin-friendly presidential candidate in Donald Trump, ETH spot ETF approvals and other risky asset markets such as US stocks reaching new all-time highs.
Featured Image: Freepik