Crypto markets retreat as Fed adjusts rate cut outlook

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18th June 2024 – (New York) In the wake of revised interest rate cut expectations by the Federal Reserve, the leading cryptocurrencies experienced a downturn during the European morning trade. Bitcoin and Ether, two of the largest cryptocurrencies by market capitalisation, both saw their values drop by approximately 1% over a 24-hour period, according to the latest CoinDesk Indices data.

Bitcoin’s price dipped just below the $66,000 mark, positioning itself at the lower end of the $72,000-$65,000 trading range observed over the past month. Meanwhile, Ether was trading around $3,500. The broader cryptocurrency market also felt the pressure, with the CoinDesk 20 Index (CD20) declining by about 1.8%.

The market’s subdued mood was further influenced by the closure of markets in several countries for the Eid al-Adha festival, a significant event in Islam. Notably, meme coins experienced sharper declines, with SHIB shedding 3.5% and DOGE dropping 1.7%.

In contrast, U.S.-listed Bitcoin mining companies have seen substantial growth, reaching a record market capitalization of $22.8 billion on June 15, as reported by JPMorgan. This surge was led by notable performances in the first half of June, with Core Scientific adding 117% following a deal with artificial intelligence firm CoreWeave, making it the best performer among its peers. However, not all firms saw gains; Argo Blockchain, for instance, fell by 7%.

Further developments in the crypto regulatory landscape were noted as the Financial Stability Board (FSB) convened in Toronto to deliberate on the challenges posed by stablecoins, particularly in emerging and developing economies. The FSB, a pivotal entity in shaping global crypto policies, emphasised the need for continued attention to the sector’s growth and its implications.