Bitcoin, Ether Fall After Europe’s Interest Rate Hikes; US stock futures rise despite bank woes
Bitcoin fell in trading in Asia on Friday morning to below $29,000 following interest rate hikes by the European Central Bank (ECB). Ether fell below USD 1,900 while most other top 10 non-stablecoin cryptocurrencies recorded losses. Solana’s SOL led the losers. U.S. stock futures traded higher after Wall Street tumbled on Thursday amid renewed concerns about the U.S. banking system and a potential recession in the economy.
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Bitcoin falls, Solana leads losers
Bitcoin was down 0.40% at US$28,949 in the 24 hours to 09:00 a.m. in Hong Kong, according to CoinMarketCap data, and fell 1.88% for the week. The world’s largest cryptocurrency has added over 70% year-to-date, but is down approx. 6.6% from its 30-day high of US$31,005 hit on April 14.
Bitcoin and other cryptocurrencies fell as investors digested the recent interest rate hikes in the US and Europe, which “could add more pressure on cryptocurrencies in the near term as some investors turn to more caution and as safer assets like Treasuries become more appealing,” it said he. Denys Peleshok, head of Asia at CPT Markets, in an email message shared with Discard.
“However, in the medium term, crypto markets could benefit from the expected pause and the possible rate cut (in the US),” said Peleshok, who estimated that the Federal Reserve’s changed rhetoric could give investors more risk-taking.
Fed Chairman Jerome Powell noted that his agency is prepared for further rate hikes if “greater restraint in monetary policy is warranted,” sending mixed signals to markets.
Ether fell 1.21% to $1,880, for a weekly loss of 1.55%.
Most of the other top 10 non-stablecoin cryptocurrencies also traded lower, with the exception of XRP and Tron, which gained 0.12% and 0.48% in the last 24 hours.
Solana’s SOL led the losers, falling 2.45% to $21.80 and trading down 2.88% for the week.
The total crypto market capitalization decreased 0.71% in the last 24 hours to $1.19 trillion. Total trading volume fell 23.57% to $32.38 billion.
Ethereum NFT sales fall
The indices are proxy measures of the performance of the global NFT market. They are managed by CryptoSlam, a sister company of Forkast.News under the Forkast.Labs umbrella.
In the non-fungible token (NFT) market, the Forkast 500 NFT index fell 0.74% to 3,640.20 in the 24 hours to 09:00 in Hong Kong, down 1.83% for the week.
The Ethereum blockchain saw NFT sales volume drop over 27% in the past 24 hours, according to data from CryptoSlam, amid rising average transaction fees on Ethereum, which were $16.74 on May 4, according to data from blockchain intelligence platform IntoTheBlock , a increase from USD 3 at the beginning of the year.
According to NFT data aggregator CryptoSlam, over $635 million of Ethereum NFT sales in April were wash trades, accounting for nearly 60% of all NFT trades on the blockchain for the month. Wash trade refers to an investor who acts as both buyer and seller of a financial instrument in order to generate deceptive trading volume and potentially manipulate prices. The practice is illegal in US securities markets.
The current wash trades on Ethereum are primarily driven by investors using Blur marketplace points, the platform’s loyalty system that incentivizes users’ bids and listings of NFTs, according to CryptoSlam.
“Wash trading is expected to continue and possibly increase on Ethereum as traders use liquidity-providing tools like BenDAO, NFTfi, and Blur’s new Blend lending protocol to pursue more platform rewards in Blur’s Season 2,” Yehudah Petscher, analyst at CryptoSlam, said in a comment.
US banking woes continue
U.S. stock futures were trading higher as of 9 a.m. in Hong Kong. Dow Jones Industrial Average futures rose 0.24 percent. S&P 500 futures rose 0.40%. And Nasdaq Composite futures rose 0.51%.
The three indexes closed lower on Thursday, driven by growing concerns in the US banking system. PacWest Bancorp., a California-based bank, saw its stock drop more than 50% on Thursday after the lender reportedly considered strategic options, including a sale, leading to a decline in several regional banks.
“The ongoing problems in the banking sector could raise concerns about the ability of traditional finance to withstand economic shocks and could push more investors towards digital assets. The crypto market has already benefited from a surge in inflows during previous bank failures this year and could continue to do so if new collapses are emerging,” said Peleshok of CPT Markets.
On the economic front, U.S. initial jobless claims rose 13,000 to 242,000 in the week ended April 29, beating expectations for 240,000 and pointing to a slowdown in the labor market, Bloomberg reported Thursday.
Given the “restrictive interest rates, tightening credit from the regional banking crisis and weakness in several leading indicators”, the US economy could enter a mild recession in the third or fourth quarter of 2023, according to a report from the Independent Commodity Intelligence Services on Thursday. .
The Fed’s next move on interest rates will come on 14 June. Analysts at CME Group now expect a 99.6% chance that the Fed will keep interest rates unchanged at 5% to 5.25%, and a 0.4% chance of a 25 basis point rate cut. .
Meanwhile, in Europe, the ECB on Thursday decided to raise interest rates by another 25 basis points to 3.25%, signaling more monetary tightening to come.
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