Bitcoin‘s price dropped on Friday, further distancing itself from the highs reached earlier in the week as apprehensions about prolonged high U.S. interest rates overshadowed a significant development in the approval of exchange-traded funds (ETFs) that directly track Ether.
Despite maintaining some weekly gains, Bitcoin’s price fell back into the $60,000 to $70,000 trading range it has been stuck in for over two months. The cryptocurrency trimmed most of its weekly gains on Thursday and Friday.
By 01:45 ET (05:45 GMT) on Friday, Bitcoin had fallen 3.2% in the past 24 hours, settling at $67,215.9.
Ether Slips Amid Profit-Taking, But Sees Strong Weekly Performance
Ether, the world’s second-largest cryptocurrency, dipped 1.2% to $3,748.97 due to some profit-taking. However, it remained up by 21% over the past seven days, largely driven by the U.S. Securities and Exchange Commission’s (SEC) approval of applications from several major exchanges to list a spot Ether ETF.
The SEC approved applications from the Nasdaq, CBOE, and NYSE to list ETFs that directly track the price of Ether. This step marked progress towards the eventual approval of a spot ETF for trade, although the SEC now needs to engage with applications from fund managers, including VanEck, ARK Investment Management, and seven other issuers.
Rumors of the SEC’s approval had boosted Ether prices throughout the week, with the actual announcement causing temporary gains in the token.
Crypto Market Faces Pressure from U.S. Rate Fears
Concerns over sustained high U.S. interest rates were a significant pressure point for the crypto markets. Hawkish signals from the Federal Reserve reflected growing anxiety among policymakers about persistent inflation.
Several Fed members indicated that inflation is likely to take longer to reach the central bank’s 2% annual target. The minutes from the Fed’s late-April meeting showed that some policymakers were even considering further interest rate hikes.
This sentiment led traders to largely rule out expectations for rate cuts this year. According to the CME FedWatch tool, traders were pricing in nearly equal probabilities of a rate cut or a hold in September, both around 46%.
High interest rates generally have a negative impact on the crypto sector, which tends to perform better in low-rate, high-liquidity environments. Most token prices declined in response to these developments, with a strengthening dollar also putting pressure on the market.
Other Cryptocurrencies Also Decline
Other major cryptocurrencies experienced declines as well. Solana and XRP fell by 5.7% and 0.5%, respectively. Meme tokens SHIB and DOGE also saw decreases, with SHIB falling 3.9% and DOGE down 0.3%.
