Bitcoin experienced a modest uptick in price on Thursday, maintaining proximity to a trading range observed throughout the week, as market participants awaited further indications on U.S. interest rates amid growing regulatory scrutiny of cryptocurrencies. Meanwhile, former FTX CEO Sam Bankman-Fried faced sentencing today, marking a significant development in the crypto landscape.
The world’s leading cryptocurrency recorded a 1.11% increase over the past 24 hours, reaching $70,747.7 by 13:09 ET (17:09 GMT). Bitcoin had been trading within a confined range for the past fortnight following a surge to all-time highs earlier in March, with the pace of capital inflows into recently approved spot exchange-traded funds suggesting a waning enthusiasm for the digital asset.
Pressure stemming from a strengthening dollar, which climbed to one-month highs this week, curtailed significant upward movements in Bitcoin. Additionally, dovish remarks from major central banks globally propelled traders towards the greenback, perceived as a high-yielding, low-risk currency.
Market attention was squarely fixed on the forthcoming release of the Personal Consumption Expenditures (PCE) price index data on Friday, the Federal Reserve’s preferred gauge of inflation. This data is anticipated to influence the central bank’s stance on interest rates. Any indication of persistent inflation could potentially alter the Fed’s outlook, impacting Bitcoin unfavorably, as the token traditionally flourishes in high-liquidity, risk-oriented markets.
Following the PCE data release, Federal Reserve officials Jerome Powell and Mary Daly are scheduled to deliver speeches, with market participants keenly awaiting further insights into the central bank’s position on interest rates and inflation. Notably, recent comments from Fed officials, including Governor Christopher Waller, hinting at a somewhat hawkish tone have contributed to market uncertainties.
In a significant development, Sam Bankman-Fried, the former CEO of FTX, was sentenced to 25 years in prison and fined $11 billion for his involvement in a fraud and conspiracy scheme that led to the collapse of the prominent crypto exchange. The sentencing, announced by Judge Lewis Kaplan in a Manhattan Federal court, followed a monthlong trial in November where Bankman-Fried was found guilty on seven charges related to the exchange’s failure and the disappearance of approximately $10 billion in customer deposits.
Moreover, market sentiment towards cryptocurrencies was further unsettled by a pivotal development in the Securities and Exchange Commission’s lawsuit against Coinbase Global Inc (NASDAQ: COIN). While a U.S. judge ruled that the lawsuit could proceed, one of the SEC‘s claims against Coinbase was dismissed, underscoring the ongoing legal uncertainties surrounding crypto tokens and their regulatory status.
Despite Bitcoin’s recent consolidation, it remains poised for a significant gain of over 50% in the first quarter of 2024, propelled by heightened capital flows following the approval of spot ETFs in the United States earlier this year. However, heightened market volatility is anticipated ahead of the expiration of bitcoin and ether options contracts valued at $15.2 billion on Deribit, with potential bullish implications observed as a considerable volume of options expire in-the-money.
