Bitcoin trades below $61,000 as equity indices hit new highs
Quick Take
- Bitcoin’s price slid below the $61,000 mark, despite equity indices hitting record highs.
- The S&P 500 reached an all-time high, increasing by 0.6% to 5,509.
- This comes as Federal Reserve Chair Jerome Powell stated that progress has been made on inflation.
Even as the S&P 500 reaches an all-time high, Bitcoin has not mirrored the optimistic trend in equities.
Bitcoin’s price has continued to trade sideways and slid below the $61,000 mark during early morning trading on Wednesday. Its price decreased by around 2% in the past 24 hours, currently sitting at $60,500 at 5:15 a.m. ET, according to The Block’s price page. Nevertheless, the largest cryptocurrency by market cap is up 35% year-to-date after seeing its record high prices of over $73,000 in mid-March.
On the macro front, U.S. Federal Reserve Chair Jerome Powell made a recent statement that the central bank has made "quite a bit of progress" on inflation but needs more confidence before cutting rates. On Tuesday, Powell and European Central Bank (ECB) President Christine Lagarde discussed monetary policy at the ECB Forum on Central Banking in Sintra. "The labor market is still strong, and the disinflation trend shows signs of resuming. We have made quite a bit of progress on inflation, and we are getting back on disinflationary path," Powell said at the event in Portugal.
Global equities remain buoyant
The Fed's more dovish tones may have impacted equity markets. Futures ticked higher after this week's statement on inflation. Dow Jones Industrial Average futures increased 0.073% and S&P 500 futures climbed 0.018% in pre-market trading.
By the close of trading on Tuesday, the S&P 500 had increased by 0.6% to 5,509.01, surpassing its all-time high set two weeks ago. The Dow Jones Industrial Average rose by 0.4% to 39,331.85, and the Nasdaq Composite added 0.8% to 18,028.76, exceeding its own record set a day earlier.
Meanwhile, major European and UK equity indices were green in early trading on Wednesday. In London, the FTSE 100 posted a 39.57-point increase to 8,160.77 in early-day trading. The European Stoxx 600 index increased 2.49 points to 513.40.
Fed's remarks see an uptick in rate cut possibilities
Market participants have been closely monitoring inflation data to predict when the U.S. Federal Reserve might start reducing interest rates. Fed chair Jerome Powell's dovish remarks at the ECB on Tuesday will have been noted by interest rate traders, with the market now increasing their expectations for a rate cut in September.
According to the CME Group FedWatch Tool, interest rate traders have now increased the chance of a rate cut by the central bank at September's Federal Open Market Committee (FOMC) meeting from 59% to 67%.
The U.S. Federal Reserve targets a 2% inflation rate and began raising interest rates in March 2022. The Fed last increased rates in July 2023 and has since maintained them at the benchmark overnight borrowing level range of 5.25%-5.50%, the highest in approximately 23 years.
Disclaimer: The Block is an independent media outlet that delivers news, research, and data. As of November 2023, Foresight Ventures is a majority investor of The Block. Foresight Ventures invests in other companies in the crypto space. Crypto exchange Bitget is an anchor LP for Foresight Ventures. The Block continues to operate independently to deliver objective, impactful, and timely information about the crypto industry. Here are our current financial disclosures.
© 2024 The Block. All Rights Reserved. This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.
