The CoinDesk 20 (CD20), a benchmark for the largest digital assets, began the Asia trading week down 7%, with Bitcoin trading 5% lower amid increased expectations for a Federal Reserve rate cut in September.
Nearly every asset in the CD20 has posted larger losses than Bitcoin. Ether (ETH) is down 5.8%, Solana (SOL) down 7.8%, and XRP down 7%. Data from CoinGlass reveals $175 million in long liquidations over the past 24 hours.
Bitcoin’s 13% decline over the last week mirrors its performance in the aftermath of the FTX collapse.
Stronger-than-expected U.S. jobs data, coupled with a rising unemployment rate, has fueled speculation of a Fed rate cut in September, according to a note from ING. James Knightley of ING highlighted weak private sector job growth, with only 136,000 new jobs added in June, falling short of the 160,000 expected. The bulk of new jobs came from government, education, and healthcare services, while retail, temporary help, professional business services, and manufacturing experienced job losses.
Citi Research offers a more aggressive forecast, predicting eight Federal Reserve rate cuts from September 2024 through July 2025, which would lower the benchmark rate by 200 basis points to 3.25%-3.5%.
On Polymarket, bettors estimate a 34% chance of one rate cut and a 37% chance of two rate cuts by the end of the year.
Despite these dovish Fed expectations, Asian stocks did not see an uplift. Sentiment was dampened by the European Union’s decision to impose steep tariffs on Chinese electric vehicle imports. Additionally, French voters increased leftist seats more than far-right ones, but the lack of a majority leaves the potential for a hung parliament, creating risks of political and policy paralysis in European markets.
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