Bitcoin’s price experienced a modest increase on Wednesday due to a temporary decline in the dollar’s value. However, broader crypto prices were subdued amid persistent concerns over prolonged higher interest rates and waning enthusiasm for exchange-traded funds (ETFs).
Bitcoin rose 1% in the past 24 hours to $67,001.7, but has remained largely within a $60,000 to $70,000 trading range since hitting a record high of over $73,000 in early-March. The world’s largest cryptocurrency also saw limited gains even as technology stocks, which it usually tracks, rebounded sharply this week.
Data earlier this week showed that crypto investment products, specifically Bitcoin ETFs, saw a second straight week of capital outflows, amid dwindling hype over the U.S. approval of the ETFs earlier this year. While the ETF approval had powered Bitcoin to record highs in March, further gains in the token now appeared in doubt.
Broader cryptocurrency prices saw limited price action on Wednesday, as the sector was pressured by persistent concerns over higher-for-longer U.S. interest rates. Ethereum rose 2.4%, while XRP and Solana added 0.3% and 2.2%, respectively.
While crypto prices had advanced through the first quarter of 2024 on expectations of early interest rate cuts by the Federal Reserve, optimism over such a scenario died out in April. Strong inflation readings and hawkish signals from the Fed saw traders price out expectations for a rate cut in June. Higher-for-longer interest rates bode poorly for crypto, given that the sector usually benefits from increased speculation in a low-rate, high-liquidity environment.
Focus this week is on more data on the U.S. economy, which is likely to factor into the outlook on interest rates. Gross domestic product data for the first quarter is due on Thursday, while PCE price index data, the Fed’s preferred inflation gauge, is due on Friday.
