Cryptocurrency markets remained under pressure during U.S. trading hours on Thursday, continuing a pullback that began a day earlier when the Fed signaled it only expected to cut rates once this year.
The price of ether (ETH) led a mid-morning bounce after U.S. Securities and Exchange Chairman Gary Gensler – in testimony at a Senate hearing – said he expected spot ether ETFs to have received full approvals from his agency by the end of the summer.
The news sent ether higher by 1% but it turned out to have been a selling opportunity, with the price reversing more than 3% just one hour later. At press time, ether was changing hands at $3,440, down 5% over the past 24 hours. The broader CoinDesk 20 Index was lower by 4.9% over the same period.
Also off by nearly 5% was the price of bitcoin (BTC), which was trading near a one-week low of $66,300.
Markets began heading south on Wednesday afternoon after the Federal Reserve’s hawkish policy meeting results. The U.S. central bank held its benchmark fed funds rate range steady at 5.25%-5.50% but surprised with its updated projections suggesting an expectation for just one 25 basis point rate cut in 2024. Rate futures markets, meanwhile, had been pricing in two to three 25 basis point moves this year.
Failing to improve the macro mood in crypto was U.S. economic data Thursday morning suggesting a continued softening in both the inflation and the economy. The May Producer Price Index (PPI) fell 0.2% against expectations for a rise of 0.1%. On a year-over-year basis, PPI was higher by 2.2% versus forecasts for 2.5%. There were also initial jobless claims which rose to nearly a one-year high of 242,000 versus expectations of 225,000.
“$66K seems like equilibrium,” said well-followed analyst Skew in an X post, who along with others is trying to decode a market that won’t go sustainably higher despite a lot of recent bullish news: improving inflation data, a Bitcoin-friendly presidential frontrunner in Donald Trump, spot ETH ETF approvals, and other risk asset markets (namely U.S. stocks) ripping to new all-time highs.
Disclosure
Please note that our privacy policy, terms of use, cookies, and do not sell my personal information has been updated.CoinDesk is an award-winning media outlet that covers the cryptocurrency industry. Its journalists abide by a strict set of editorial policies. In November 2023, CoinDesk was acquired by the Bullish group, owner of Bullish, a regulated, digital assets exchange. The Bullish group is majority-owned by Block.one; both companies have interests in a variety of blockchain and digital asset businesses and significant holdings of digital assets, including bitcoin. CoinDesk operates as an independent subsidiary with an editorial committee to protect journalistic independence. CoinDesk employees, including journalists, may receive options in the Bullish group as part of their compensation.
Stephen Alpher is CoinDesk’s managing editor for Markets. He holds BTC above CoinDesk’s disclosure threshold of $1,000.
Krisztian Sandor is a reporter on the U.S. markets team focusing on stablecoins and institutional investment. He holds BTC and ETH.