Bitcoin prices edged up slightly, remaining confined within a narrow trading range as traders awaited crucial U.S. economic data that could influence interest rate decisions.
Easing Concerns Over Mt Gox, Strong Dollar Impact
Bitcoin saw some relief as concerns eased over a massive potential sell-off by the defunct exchange Mt Gox. However, this was offset by a stronger U.S. dollar, which reached a two-week high due to anticipation of more economic data, keeping traders leaning towards the greenback. Bitcoin climbed 0.5% in the past 24 hours, reaching $68,109.3 by 08:42 ET (12:42 GMT). The leading cryptocurrency has remained between $60,000 and $70,000 since mid-March.
Inflation and Rate Concerns Keep Bitcoin Under Pressure
The crypto market has been impacted by recent hawkish comments from the Federal Reserve, with several policymakers indicating that more evidence is needed to confirm that inflation is decreasing. This has put the spotlight on upcoming U.S. economic data, particularly the revised first-quarter GDP figures due later on Thursday, which could provide the Fed with more justification to maintain higher interest rates if the data shows economic resilience. The most closely watched data will be the PCE price index, the Fed’s preferred inflation gauge, due on Friday.
Traders have been steadily adjusting their expectations, moving away from the notion that the Fed will cut rates in September. This has strengthened the dollar and put pressure on risk-driven assets, including cryptocurrencies. High interest rates are generally unfavorable for crypto, as they reduce the attractiveness of speculative investments.
Crypto Investment Trends
Despite the pressure, recent data indicates that crypto investment products have seen a third consecutive week of inflows, with increased interest in Ether driven by optimism over the potential U.S. approval of an exchange-traded fund (ETF) directly tracking the world’s second-largest token.
Market Movements: Ether and Altcoins
Ether fell 1.6% to $3,750.05 on Thursday, pulling back from recent two-month highs as excitement over the immediate approval of a spot Ether ETF waned. Although the Securities and Exchange Commission (SEC) has approved applications from major exchanges to list any potential spot ETF products, the regulator still needs to review applications from potential issuers, indicating that a listing is not imminent.
Other altcoins also saw declines amid concerns over interest rates. Solana and XRP dropped 0.7% and 1.7%, respectively, while meme tokens like Shiba Inu and DOGE/USD each lost around 3%.
Singapore’s DBS Bank: A Major Ether Holder
In a notable development, on-chain analytics firm Nansen revealed that DBS, Singapore’s largest bank, holds a significant amount of Ether. The identified blockchain address belonging to DBS holds 173,753 ETH, valued at $647 million at current market prices, and has generated over $200 million from its Ether investments.
DBS has been active in the crypto market, offering services such as digital asset custody, a trading exchange for security tokens, and a portfolio management app covering both traditional and crypto assets. A recent report from the bank highlighted the growing interest in the crypto market from retail investors, high-frequency traders, and hedge funds.
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