Bitcoin and other cryptocurrencies slipped Thursday as risk-sensitive assets weakened after the Federal Reserve’s latest monetary policy decision.
Cryptos are poised to return to range-bound trading that has been defined in recent months.
Gold prices lingered near a one-week low.
Dollar and Treasury yields reaped the returns of the Federal Reserve’s hawkish stance on interest rates.
The Dollar stood at a near six-month peak on the prospect of higher-for-longer U.S rates. Central Banks for the world’s biggest economies have served the notices that they will keep the interest rates as high as needed to tame inflation, even as two years of unprecedented global policy tightening reach a peak.
Gold price declined to a fresh six-day low below USD$1,920. At the time of writing, XAU/USD was down 0.6% on the day at USD$1,918.50. On Wednesday, XAU/USD climbed toward $1,950 before making a sharp U-turn in the late American session. The Federal Reserve’s policy meeting Wednesday left its benchmark interest rate unchanged but signalled rates would stay high next year, which helped to push the U.S. dollar sharply higher.
Meanwhile, the Bank of England went against the market expectation of a 25-bps rate hike and held its policy rate steady at 5.25%. The sharp decline seen in GBP/USD after this decision highlighted that the USD managed to capture capital outflows out of Pound Sterling. In turn, the USD gathered additional strength and caused XAU/USD to decline further.
The price of bitcoin has retreated to around USD$26,850, moving lower from Wednesday’s peak near USD$27,300 after the Federal Reserve Bank kept interest rates unchanged but signaled that borrowing costs are to be increased again. The largest digital asset thus returns to the zone around $26,000 and has defined the period of stagnant activity for more than a month with historically low volatility and trading volumes contributing to a lull in crypto markets.
Ethereum Price corrected lower from the USD$1,670 resistance against the U.S. dollar. On September 19, the total value staked in Ethereum 2.0 contracts crossed 30 million ETH for the first time since. On-Chain data reveals the Feds paused announcement may have triggered the bullish response among Ethereum investors.
The fundamentals within the crypto market, especially for Bitcoin, continue to improve. The number of Bitcoin addresses holding more than 1 BTC is steadily increasing. Nearly 30% of Bitcoin’s total supply hasn’t been moved in over 5 years. Asset allocators managing over $17 trillion in assets have sought approval for Bitcoin spot ETFs. Bitcoin is consistently withdrawn from exchanges, and the upcoming halving event is on the horizon.
Crypto Project News
Tether has resumed lending its USDT to customers. The report cited that the move comes less than a year after Tether had announced its intention to wind down the practice. Tether stated that the decision to resume lending was prompted by short-term loan requests from longstanding clients and the company’s commitment to eliminate these loans by 2024. Tether’s goal is to prevent a significant depletion of customer liquidity or to prevent customers from selling collateral at potentially unfavourable prices and potentially incurring losses. Tether is also entering a $420 million deal involving artificial intelligence chips and Bitcoin mining firm Northern Data. That report indicates that Tether has spent $420 million in acquiring 10,000 Nvidia H100 GPUs, roughly constituting 2% of Nvidia’s total shipments of 550,000 GPUs for the year. H100 is the world’s most advanced chip ever built. It features major advances to accelerate AI, HPC, memory bandwidth, interconnect, and communication at the data centre scale.
Zodia Custody, a subsidiary of Standard Chartered, is set to introduce a new service that will allow institutional clients to earn returns on their cryptocurrency holdings for the first time. In an announcement today, the company revealed its partnership with OpenEden, aiming to bridge the gap between crypto assets held in custody and real-world yield opportunities. This offering will also grant institutional clients access to staking services.
Blockchain Capital, a venture capital group, has announced the successful closure of two new funds, amassing a total of $580 million. These funds are designed for investments in diverse sectors, including infrastructure, gaming, DeFi (decentralised Finance), as well as consumer and social technologies.
Grayscale Investments filed paperwork with the Securities and Exchange Commission. Tuesday for a new exchange-traded fund tracking the future. The ETF is filed under the Securities Act of 1933, the regulation under which commodities and spot bitcoin ETFs are filed. Previously, Grayscale also filed for a separate ether futures ETF under the Investment Company Act of 1940, under which most securities-based ETFs are registered. The distinction is notable because the SEC has approved bitcoin futures ETFs registered under both Acts, making some investors believe the agency is comfortable with bitcoin futures in general.
The US government’s stance on cryptocurrencies remains rather enigmatic. On the one hand, regulatory authorities are stepping up their enforcement actions, closely pursuing cryptocurrency institutions. Just in 2023 H1 alone, the SEC has taken legal actions against institutions including Genesis, Kraken, Binance, and Coinbase. On the other hand, the US government is the government that holds the largest Bitcoin. According to Glassnode, as of July 27th, the US government held approximately 194,188 BTCs, roughly 1% of the total Bitcoin supply, valued at about $5.68 billion. Although these Bitcoins have been confiscated from lawbreakers without any cost, unlike other governments, the US hasn’t been in a rush to convert them into cash and has opted to retain ownership.
Crypto exchange Kraken ‘disappointed’ over regulator proceedings in Australia. The regulator alleged that Bit Trade, the provider for Kraken in Australia, did not make a target market determination before offering its margin trading product to Australian customers. The Australian Securities and Investments Commission (ASIC) has commenced civil proceedings against Bit Trade, the provider of the Kraken crypto exchange in Australia, for failing to comply with design and distribution obligations for one of its trading products. According to a Sept. 21 statement from ASIC, the Australian financial regulator alleged that Bit Trade failed to make a target market determination before offering its margin trading product to Australian customers.
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