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Bitcoin price today: unchanged at $69k amid Fed fears, spot Ether ETF focus

Published 05/23/2024, 01:48 AM
Updated 05/23/2024, 09:09 AM
© Reuters

Investing.com-- Bitcoin price moved marginally on Thursday as a recent rally in cryptocurrencies, on hype over a potential spot Ether exchange-traded fund, was largely undermined by renewed fears of high U.S. interest rates.

U.S. rate jitters sparked strong overnight gains in the dollar, which pressured crypto prices across the board.

Bitcoin slipped 0.35% in the past 24 hours to $69,390 by 09:05 ET (13:05 GMT). The world’s biggest cryptocurrency settled back into a trading range seen for most of the past two months, after a brief breakout earlier this week.

World no.2 token Ether hovered around two-month highs hit earlier this week, retaining a bulk of gains made on hype over the potential approval of a spot Ether ETF for U.S. markets. The Securities and Exchange Commission is set to make a decision on the matter as soon as Thursday or Friday.

Spot Ether ETF dominates market focus 

Ether rose around 5.5% over the past 24 hours to $3,878.84. The token marked a strong rally this week after reports on Monday said the SEC had asked certain exchanges to fine-tune their filings for spot Ether ETFs.

While the move did mark some progress towards a spot ETF approval, it did not guarantee their approval. 

The SEC is now set to decide on applications for a spot Ether ETF from VanEck, ARK Investment Management and seven other issuers later on Thursday or Friday. 

According to QCP Capital, the approval of spot ether ETFs in the U.S. could potentially drive a rally of up to 60% in the second-largest cryptocurrency in the coming months.

The forecast mirrors the market reaction seen after spot bitcoin ETFs were approved in January, said the Singapore-based firm in a Thursday broadcast on Telegram. Bitcoin surged from $42,000 to over $73,000 within two weeks of the ETFs beginning to trade on January 11, as per CoinGecko data.

"With Friday implied volatility above 100%, the market is expecting fireworks," QCP said.

"VanEck’s ETF has been listed by the DTCC. We think approval is now highly likely with trading expected as early as next week,” it added.

Implied volatility measures the market's expectation of future price fluctuations for a financial instrument.

Crypto price today: rate jitters intensify, dent prices 

Broader cryptocurrency markets unwound a bulk of gains made earlier this week, as fears of high for longer U.S. interest rates ramped up following some hawkish signals from the Federal Reserve.

The minutes of the Fed’s late-April meeting showed increasing concerns among policymakers over sticky inflation, with some members even signaling they were prepared to hike rates to quell inflation.

A slew of Fed officials also warned this week that the bank had little confidence that inflation was easing steadily towards its 2% annual target. 

While the chances of another rate hike are dim, any stickiness in inflation is likely to delay the Fed’s plans to begin trimming rates. High for long rates bode poorly for crypto markets, given that the sector usually thrives in low-rate, high-liquidity markets. 

Altcoin prices mostly fell on Thursday. SOL shed 2.5%, while XRP lost 1%. Among meme tokens, SHIB fell 0.5%, while DOGE climbed 0.3%.

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