Aug 20 2024: Bitcoin’s price climbed on Tuesday, reflecting broader gains across risk-driven markets, fueled by increasing expectations that the Federal Reserve will begin cutting interest rates in September.
As of 01:29 ET (05:29 GMT), Bitcoin, the world’s largest cryptocurrency, rose by 4.5% to $61,176.1.
Concerns over token distributions from the defunct crypto exchange Mt. Gox, which had been weighing on the market, seem to have eased. Additionally, recent data showed positive capital flows into crypto investment products over the past week.
Despite these gains, Bitcoin remains close to the trading range it has occupied for much of the year, struggling to break new highs as overall interest in cryptocurrencies wanes.
Bitcoin Benefits from Rate Cut Speculation, Powell’s Speech in Focus
The rise in Bitcoin and crypto markets mirrors a broader risk-on sentiment across global markets, with Wall Street indexes posting strong gains on Monday.
Investor confidence has grown amid increasing speculation that the Fed will cut rates in September, with traders betting on a 25 basis point reduction, according to CME Fedwatch.
This week, all eyes are on Federal Reserve Chair Jerome Powell, who is set to speak at the Jackson Hole Symposium on Friday. Although Powell is unlikely to explicitly announce plans for a rate cut, he is expected to offer optimistic commentary, especially given recent data showing some easing in U.S. inflation.
Lower interest rates are generally favorable for risk-heavy, speculative assets like cryptocurrencies.
Yen Appreciation Could Pose Risks
However, the sharp rise in the Japanese yen this week could pose some risks to cryptocurrencies. A similar trend earlier in August had negatively impacted crypto prices. The yen, often used in speculative trading due to Japan’s relatively low interest rates, saw significant gains following hawkish signals from the Bank of Japan, leading to an unwinding of carry trades that involved crypto.
Although the yen had weakened over the past week, its sudden appreciation on Monday could present challenges for risk-driven markets.
Crypto Prices Today: Altcoins Rise Alongside Bitcoin
Broader cryptocurrency prices also advanced on Tuesday, with Ether, the world’s second-largest token, gaining 2.2% to reach $2,681.48.
Solana (SOL) rose by 3.7%, even as data showed that investors had heavily sold Solana investment products in the past week. Reports indicated that Mango Markers, once the largest decentralized exchange on the Solana blockchain, was nearing a settlement with the Securities and Exchange Commission over several securities law violations.
Other altcoins saw gains as well, with XRP, ADA, and MATIC rising between 3% and 7%.
Among meme tokens, Dogecoin (DOGE) increased by 4.7%.
