May 24 2024: Bitcoin prices declined on Friday, continuing their slide from earlier in the week as concerns over prolonged high U.S. interest rates overshadowed the significant development of the approval of exchange-traded funds (ETFs) that directly track Ether.
Despite retaining some weekly gains, Bitcoin returned to its $60,000 to $70,000 trading range, where it has hovered for over two months. The cryptocurrency gave up much of its weekly gains on Thursday and Friday, falling 3.2% in the past 24 hours to $67,215.9 by 01:45 ET (05:45 GMT).
Ether Declines but Set for a Strong Week Amid Spot ETF Approval
Ether, the world’s second-largest cryptocurrency, dipped 1.2% to $3,748.97 amid profit-taking. However, it saw a 21% increase over the past seven days, driven by the U.S. Securities and Exchange Commission (SEC) approving several major exchanges’ applications to list a spot Ether ETF.
The SEC approved applications from Nasdaq, CBOE, and NYSE to list ETFs directly tracking Ether’s price. This move marked significant progress towards eventually listing a spot ETF, although the SEC still needs to engage with fund managers’ applications, including those from VanEck, ARK Investment Management, and seven other issuers.
Rumors of the SEC’s approval boosted Ether prices throughout the week, with the actual event sparking brief gains.
Crypto Market Sentiment Dampened by U.S. Rate Hike Fears
Fears of prolonged high U.S. interest rates were a major pressure point on the crypto market. Hawkish signals from the Federal Reserve indicated growing concern among policymakers about persistent inflation.
Several Fed members suggested inflation would take longer to reach the central bank’s 2% annual target. Minutes from the bank’s late-April meeting revealed that some policymakers were open to further rate hikes.
As a result, traders largely dismissed the possibility of rate cuts this year. The CME FedWatch tool indicated an almost equal probability of a rate cut or hold in September, around 46%.
High interest rates generally bode poorly for cryptocurrencies, which thrive in low-rate, high-liquidity environments. This notion, coupled with a stronger dollar, pressured most token prices. Solana and XRP fell 5.7% and 0.5%, respectively, while meme tokens SHIB and DOGE dropped 3.9% and 0.3%, respectively.