The cryptocurrency market witnessed a relatively stagnant performance on Thursday, as the recent surge in digital asset values, fueled by anticipation surrounding a potential spot Ether exchange-traded fund (ETF), grappled with renewed concerns over elevated U.S. interest rates.
The momentum in cryptocurrencies was notably tempered by a robust overnight rally in the dollar, exerting downward pressure on crypto valuations across the spectrum.
Bitcoin, the foremost cryptocurrency, experienced a marginal decline of 0.3% over the past 24 hours, settling at $69,418.9 as of 01:21 ET (05:21 GMT). Despite a brief breakout earlier this week, Bitcoin reverted to a trading range that has characterized its performance for the majority of the past two months.
Ether, the second-largest token by market capitalization, maintained proximity to its two-month highs achieved earlier in the week, preserving a substantial portion of the gains stimulated by expectations surrounding the potential endorsement of a spot Ether ETF for U.S. markets. Reports indicate that the Securities and Exchange Commission (SEC) is poised to render a decision on this matter imminently, possibly by Thursday or Friday.
The spotlight remains on the potential approval of a spot Ether ETF, with Ether registering a modest increase to $3,776.69 over the preceding 24-hour period. Although the SEC‘s request for certain exchanges to refine their filings for spot Ether ETFs signifies progress, it does not ensure their eventual approval.
The SEC is anticipated to deliberate on applications for a spot Ether ETF from prominent entities such as VanEck, ARK Investment Management, and seven other issuers in the coming days, which could catalyze additional capital influxes into crypto markets, reminiscent of the impact observed following the approval of a spot Bitcoin ETF earlier this year.
However, the broader cryptocurrency landscape experienced a retracement of the gains amassed earlier in the week, as apprehensions regarding prolonged high U.S. interest rates escalated in response to hawkish signals emanating from the Federal Reserve.
Minutes from the Fed’s late-April meeting revealed mounting apprehensions among policymakers regarding persistent inflationary pressures, with certain members signaling a willingness to implement rate hikes to mitigate inflationary risks. Despite the slim likelihood of an imminent rate hike, any lingering inflationary pressures may delay the Fed’s intentions to initiate rate adjustments, which could unfavorably impact crypto markets, traditionally flourishing in low-rate, high-liquidity environments.
On Thursday, altcoin prices predominantly declined, with SOL dropping by 2.2% and XRP by 1.2%. Among meme tokens, SHIB experienced a 0.7% decrease, while DOGE saw a decline of 0.8%.
