Bitcoin experienced a slight drop on Wednesday as traders eagerly awaited cues on U.S. interest rates, prompting them to secure profits following a recent surge fueled by optimism surrounding a potential Ether exchange-traded fund (ETF).
The world’s second-largest cryptocurrency, Ether, also relinquished some gains after reaching a two-month high, driven by reports indicating progress towards the approval of spot ETFs by the U.S. Securities and Exchange Commission (SEC). The SEC is poised to announce a highly-anticipated decision on the potential approval of these ETFs later this week.
However, concerns regarding persistent U.S. inflation and the prospect of prolonged high interest rates tempered trader enthusiasm towards the crypto markets, leading to a retreat in Bitcoin‘s recent gains.
Bitcoin saw a 2.1% decline over the past 24 hours, settling at $69,763.0 by 08:48 ET (12:48 GMT).
Ether Retreats Following Surge to 2-Month High; SEC ETF Decision in the Spotlight
Ether experienced a 3% decline in the past 24 hours, reaching $3,663.08 after nearing its highest level since early March. The token surged by as much as 18% on Monday.
Monday’s surge was driven by media reports suggesting that the SEC had requested exchanges to refine their filings for spot Ether ETFs, ahead of a pivotal decision on their approval later this week.
While this move signifies progress towards ETF approval, analysts caution that the SEC could still reject the applications, having not engaged with any of the applicants thus far.
Despite potential setbacks, analysts believe the SEC’s actions reflect an increased likelihood of eventual approval for a spot Ether ETF, which could trigger a rally in crypto prices, similar to the one observed with spot Bitcoin ETF approvals earlier this year.
Bitcoin Struggles to Maintain Gains Amidst Awaited Fed Signals
Bitcoin’s ascent to $71,000 on Tuesday was short-lived as the token retreated to a trading range between $60,000 and $70,000, which has been predominant over the past two months.
While optimism persists regarding a potential spot Ether ETF, concerns linger over U.S. interest rates, with several Federal Reserve officials warning that the central bank requires more confidence in inflation mitigation before considering interest rate cuts.
Attention now turns to the release of minutes from the Fed’s late-April meeting, expected to provide insights into the central bank’s timeline for interest rate adjustments.
Continued anticipation of high interest rates poses challenges for crypto markets, dampening the appeal of high-risk and speculative assets.
Altcoin Rally Cools as Bitcoin Retreats
The retreat in Bitcoin prices led to a cooling of broader altcoin prices, while trader preference remained largely biased towards Ether within the altcoin complex. Additionally, resilience in the dollar limited significant upside movements in crypto markets.
Solana experienced a 1.6% decline, while XRP shed 2.3%. Among meme coins, both Dogecoin and SHIB recorded losses of 2.8%.
BlackRock Bitcoin ETF Witnesses Significant Inflows
BlackRock’s spot Bitcoin ETF, IBIT, witnessed heightened activity following a period of relative quiet, as Bitcoin traded above the $70,000 mark for the first time in a month.
Preliminary data from Farside Investors indicates that IBIT received inflows exceeding $290 million on Tuesday, marking its highest single-day inflow this month and the largest since April 5. This figure nearly triples the previous monthly high of $93 million recorded on May 16.
Consequently, IBIT’s total holdings surged to over $19 billion, as indicated on its product page.
The substantial inflows on Tuesday contrast with earlier in the month when IBIT experienced minimal or zero inflows before May 15. In April, IBIT registered its first-ever day of outflows, contributing to bearish sentiment towards Bitcoin at that time.
WisdomTree Approved to List Crypto ETPs on London Stock Exchange
Asset manager WisdomTree received approval from the Financial Conduct Authority (FCA) to list crypto exchange-traded products (ETPs) on the London Stock Exchange (LSE).
WisdomTree stated that it is among the first applicants to have its prospectus approved by the U.K. regulator.
The Physical Bitcoin (BTCW) and Physical Ethereum (ETHW) ETPs are scheduled to commence trading on May 28, exclusively available to professional investors. These ETPs will carry fees of 35 basis points, according to the announcement made on Wednesday.
