Bitcoin‘s price exhibited a slight decline on Tuesday, staying firmly within a trading range established over the past two months, with attention primarily fixed on U.S. inflation figures for potential cues regarding interest rates.
Despite a resurgence in capital inflows into crypto investment products, there was minimal impact on price movement, even as these products experienced their first inflows in five weeks.
Over the past 24 hours, Bitcoin dipped by 1.3%, settling at $61,856.1 by 07:35 ET (11:35 GMT).
Bitcoin Struggles to Leverage Improving Capital Flows
The cryptocurrency market’s biggest player found limited support from the news that crypto investment products, notably spot Bitcoin exchange-traded funds (ETFs), witnessed their first weekly capital inflows in five weeks.
CoinShares data revealed that crypto products recorded inflows totaling $130 million in the week ending May 12, with a significant portion of these funds directed towards the U.S. Market.
The introduction of spot Bitcoin ETFs in Hong Kong also contributed to the influx of capital.
However, despite the positive developments in capital flows, overall trading volumes in crypto investment products remained subdued, lingering well below the highs observed in March during Bitcoin’s peak.
Bitcoin’s price has largely stabilized within a narrow trading range of $60,000 to $70,000 over the past two months. This stability comes amidst concerns over interest rates, regulatory uncertainties, and diminishing excitement surrounding ETFs. The much-anticipated halving event of the token also failed to make a significant impact.
Altcoins Display Mixed Performance as Inflation Concerns Linger
On Tuesday, broader crypto markets mirrored Bitcoin’s movement. Ethereum, the second-largest token, experienced a 1.9% decline to $2,906.85, while Solana saw a modest 0.4% increase and XRP remained unchanged.
Meanwhile, meme coins recorded some gains following an overnight surge in meme stocks like GameStop Corp (NYSE: GME) and AMC Entertainment Holdings Inc (NYSE: AMC) on Wall Street. Dogecoin witnessed a rise of over 5%, while newer meme coin PEPE surged by more than 20%.
Nevertheless, overall crypto prices remained subdued as investors awaited key U.S. inflation data scheduled for release later in the week.
Prospect of High U.S. Rates Dampens Crypto Market Sentiment
The looming release of producer price index inflation data, followed by the consumer price index inflation data, is anticipated to influence the outlook for U.S. rates. Persistent concerns over the likelihood of prolonged high rates weigh heavily on crypto markets, which typically thrive in low-rate, high-liquidity environments.
U.K. Election Unlikely to Derail Crypto Regulatory Progress
Despite anticipation of an upcoming U.K. election, industry insiders believe that regulatory advancements in the crypto space will continue uninterrupted. The ruling Conservative party, in power since 2010, has been proactive in introducing crypto-related measures, aiming to position the U.K. as a crypto hub since 2022. Plans include empowering the Financial Conduct Authority (FCA) to regulate crypto as a financial activity, as well as introducing legislation for stablecoins and staking before the next election.
Adam Jackson, director of policy at Innovate Finance, emphasized the importance of secondary legislation to formalize the FCA’s regulatory authority over crypto, including stablecoins, expressing confidence that these measures will be in place by the time of the national election.
