Cryptocurrencies Rise Amidst Rate Cut Uncertainty

Cryptocurrencies rose in the past 24 hours amidst uncertainty regarding the interest rate trajectory in the U.S.

Fed rate cut expectations were reinforced with the release of the Fed’s Beige book on Wednesday. The commentary on current economic conditions across the 12 Federal Reserve Districts pointed to continued sluggishness in the U.S. economy. The report showed that economic activity was little changed in nearly all Districts since early September, though two Districts reported modest growth. Most Districts reported declining manufacturing activity.

However, the initial jobless claims data released by the U.S. department of labor on Thursday dampened rate cut hopes. Initial jobless claims for the week ended October 19 unexpectedly decreased to 227 thousand from 242 thousand in the previous week. Markets had expected a level of 242 thousand. The decline in claims triggered fears of the Fed delaying rate cuts as concerns about the labor market diminished.

The CME FedWatch tool now shows the likelihood of a quarter point rate cut in November at 93 percent versus 91.8 percent a day earlier, 87.7 percent a week earlier and 41.8 percent a month earlier.

Crypto market sentiment has also been swayed by attempts to assess the potential outcome of the U.S. presidential election on risk assets, specifically cryptocurrencies. With bets of a win for Donald Trump rising, crypto analysts have turned the spotlight on the likely post-election behavior of risk assets, given the anticipated surge in the U.S. Dollar as well as U.S. treasury yields. Amidst a lingering fear that Trump’s tax and tariff policies could increase inflationary pressures, markets are wary of adverse cryptocurrency price movements even in the event of a Trump presidency.

Amidst the renewed uncertainty, Coinmarketcap’s Crypto Fear and Greed Index, a barometer of the emotional state of the market has cooled to 52, denoting a neutral stance underpinned on uncertainty. It was 60 (greed) a week earlier and 51 (neutral) a month earlier.

Mildly positive sentiment prevails in crypto currency market, with overall market capitalization rising close to a percent overnight. Market capitalization is currently at $2.31 trillion.

Bitcoin is currently trading at $67,664.66, around 8 percent below the all-time high recorded in March 2024. Bitcoin has gained 1.8 percent overnight and 1.4 percent over the past 7 days. Year-to-date gains have also increased to more than 60 percent.

Data from Farside Investors on Bitcoin Spot ETF products in the U.S. showed net inflows of $192.4 million on Wednesday versus net outflows of $79.1 million on Tuesday. iShares Bitcoin Trust (IBIT) topped with inflows of $317.5 million. Ark 21Shares Bitcoin ETF (ARKB) that witnessed record outflows on Wednesday topped outflows with $99 million.

Ethereum slipped 1.7 percent overnight to trade at $2,530.23, around 48 percent below the all-time high. Ether has shed 2.6 percent in the past 7 days. Year-to-date gains have also decreased to 10.9 percent.

Data from Farside Investors on Ethereum Spot ETF products in the U.S. showed net inflows of $1.2 million on Wednesday versus net inflows of $11.9 million a day earlier.

Bitcoin’s crypto market dominance has increased to 57.7 percent from 57.3 percent a day earlier. In contrast, Ethereum’s share of the overall crypto market has slipped to 13.2 percent from 13.5 percent a day earlier.

4th ranked BNB (BNB) added 1.2 percent overnight but has slipped quarter percent on a weekly basis to trade at $590.69. BNB has gained close to 89 percent in 2024.

5th ranked Solana (SOL) rallied 4.5 percent overnight and 15.2 percent over the past 7 days. SOL is currently trading at $175.17.

7th ranked XRP (XRP) edged up 0.62 percent overnight but is saddled with weekly losses of more than 4.2 percent to trade at $0.5296. Year-to-date losses are a little more than 13.8 percent.

Dogecoin (DOGE), ranked 8th overall has gained 0.8 percent in the past 24 hours and 14.9 percent in the past week to trade at $0.1398.

9th ranked TRON (TRX) rallied 2.2 percent overnight and in the past week. TRX is currently trading at $0.1635.

10th ranked Toncoin (TON) edged up 0.10 percent overnight but has slipped 0.3 percent over the past 7 days to trade at $5.16.

73rd ranked cat in a dogs world (MEW), a Solana-based meme coin topped overnight gains with a surge of 13.3 percent. 55th ranked Popcat (POPCAT) followed with an addition of 12.5 percent.

78th ranked Apecoin (APE) topped overnight losses with an erosion of 7.9 percent. 91st ranked Axie Infinity (AXS) and 69th ranked Maker (MKR) followed with losses of more than 3 percent.

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