Will Growth Concerns Hamper Crypto Market Sentiment?

Anxiety ahead of the release of the final reading of the second quarter GDP from the U.S. kept crypto market sentiment muted. Fed Chair Jerome Powell’s speech on Thursday morning also added to the nervousness in the market.

The U.S. Bureau of Economic Analysis would reveal on Thursday morning the final assessment of the GDP growth in the second quarter of 2024. Growth was pegged at 2.8 percent as per the initial estimate and at 3 percent as per the second estimate. The readings had helped allay fears of a hard landing for the U.S. economy given the plunge in growth to 1.4 percent in the first quarter of 2024 from 3.4 percent in the last quarter of 2023.

In the Summary of Economic Projections released a week ago, the Fed’s forecast of GDP growth in 2024 was lowered to 2 percent from 2.1 percent projected in June. The change in real GDP in 2025, 2026 and 2027 have however been maintained at the 2 percent level projected in June. In the longer run, the Fed continues to expect a growth of 1.8 percent.

The data update assumes significance as the Fed’s choice of monetary policy outlook takes into cognizance the impacts on inflation, employment as well as GDP. The Fed is aware that an expansionary monetary policy can cause an increase in GDP and employment but has the potential to jeopardize the fight against inflation. Alternatively, a contractionary policy can constrain inflation but risks decreasing GDP growth and employment.

Amidst speculation as to whether the latest GDP data would allow the Fed to pursue its monetary easing as planned, i.e. cutting another 50 basis points in 2024, 100 basis points in 2025 and 50 basis points in 2026, crypto market capitalization has rallied to $2.25 trillion. It was $2.24 trillion a day earlier.

Meme category market capitalization jumped 6.9 percent overnight to $46.9 billion. 13th ranked Shiba Inu (SHIB) which gained more than 12 percent, topped overnight gains amongst the meme cryptos ranked within the top 100 overall.

The AI & Big Data category recorded an overnight spike of 1.3 percent, lifting market capitalization to $38 billion. 41st ranked Injective (INJ) which gained more than 9 percent topped overnight gains amongst the AI & Big Data cryptos ranked within the top 100 overall.

Bitcoin traded between $63,986.74 and $62,669.27 in the past 24 hours. It is currently trading at $63,756.16 implying overnight addition of 0.06 percent, weekly gains of 2.3 percent and year-to-date rally of 50.8 percent. At its current price, the leading cryptocurrency is trading 14 percent below the all-time high recorded in March 2024.

Data from Farside Investors on Bitcoin Spot ETF products in the U.S. showed a net inflow of $105.9 million on Wednesday versus $136 million on Tuesday.

iShares Bitcoin Trust (IBIT) recorded massive inflows of $184.4 million. Bitwise Bitcoin ETF (BITB) also added $2.1 million. Ark 21Shares Bitcoin ETF (ARKB) recorded outflows of $47.4 million followed by Fidelity Wise origin Bitcoin Fund (FBTC) that recorded outflows of $33.2 million. No other ETF recorded inflows or outflows on Tuesday.

Ethereum edged down 0.14 percent in the past 24 hours to trade at $2,618.38, around 46 percent below the all-time high. Amidst weekly gains of 7.6 percent, the leading altcoin’s year-to-date gains are now above 14 percent.

Data from Farside Investors on Ethereum Spot ETF products in the U.S. showed a net inflow of $43.2 million on Wednesday versus $62.5 million a day earlier. Grayscale Ethereum Mini Trust (ETH) topped with inflows of $26.6 million. iShares Ethereum Trust ETF (ETHA) also recorded inflows of $9.4 million followed by Fidelity Ethereum Fund (FETH) that added $6.4 million.

4th ranked BNB (BNB) edged down 0.22 percent overnight but is holding on to gains of 6.7 percent on a weekly basis to trade at $594.18.

5th ranked Solana (SOL) gained 0.63 percent overnight and 8.7 percent in the past 7 days. SOL is currently trading at $150.83.

7th ranked XRP (XRP) shed 0.11 percent overnight but has gained 0.77 percent in the past week to trade at $0.5873. Nevertheless, the cryptocurrency issued by Ripple Labs is grappling with year-to-date losses of 4.5 percent.

Dogecoin (DOGE), ranked 8th overall has also gained 4.5 percent in the past 24 hours to trade at $0.1137.

9th ranked Toncoin (TON) gained 1.93 percent overnight and 1.1 percent in the past week to trade at $5.79. TON also tops year-to-date gains among the top 25 cryptocurrencies with an addition of 151 percent.

10th ranked Cardano (ADA) gained 3.3 percent overnight and 13.5 percent over the past week. ADA is currently trading at $0.3943.

71st ranked Worldcoin (WLD) topped overnight gains with a surge of more than 15 percent. 80th ranked Starknet (STRK) rallied 13.8 percent followed by 13th ranked Shiba Inu (SHIB) that added 12.2 percent overnight. 44th ranked dogwifhat (WIF) also gained 11.6 percent in the past 24 hours.

21st ranked Sui (SUI) topped overnight losses with a decline of 2.9 percent. 26th ranked Bittensor (TAO), 31st ranked Monero (XMR), 52nd ranked Sei (SEI), 65th ranked JasmyCoin (JASMY) and 43rd ranked Hedera (HBAR) have also declined more than 2 percent in the past 24 hours.

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