Bitcoin edges down amid ETF outflows and Fed caution

Today’s markets analysis on behalf of Konstantinos Chrysikos Head of Customer Relationship Management at Kudotrade

Bitcoin continues to drift lower toward the key USD 115,000 level, with ETFs seeing notable outflows, USD 196.6 million from Ethereum ETFs and USD 121.7 million from Bitcoin ETFs, indicating that institutional capital is temporarily retreating to limit exposure to risky assets. This comes at a time when investors are monitoring the developments around US monetary policy. Expectations for interest rate cuts continued to soften, now pricing in an 83% chance of a 25-basis-point reduction with a total of only two cuts by this year’s end, contributing to cautious sentiment ahead of the Jackson Hole symposium. Jerome Powell’s comments could have a strong impact on the market, as a cautious tone could further weigh on sentiment.

Meanwhile, cryptocurrencies continue to find support from the regular acquisitions by major digital assets treasury firms. The current dip could entice some to engage in more purchases. MicroStrategy expanded its Bitcoin holdings, acquiring 430 BTC for USD 51.4 million, bringing its total holdings to 629,376 BTC. Recent purchases are smaller than earlier large-scale acquisitions, reflecting investors’ caution.

Zaid Barem / ymm