The Bitcoin price experienced a slight decrease on Wednesday as traders awaited more cues on U.S. interest rates. While optimism over a potential spot Ether exchange-traded fund had driven a recent rally, concerns about inflation and high interest rates in the United States caused traders to lock in their gains, leading to Bitcoin falling by 1.5% to $69,880.1.
On the other hand, Ethereum, the world’s second-largest cryptocurrency, remained stable at an over two-month high of $3,755.37. Reports indicated progress towards the approval of spot ETFs by the Securities and Exchange Commission (SEC). The SEC’s upcoming decision on the ETFs is highly anticipated, with analysts suggesting that the approval could lead to a surge in crypto prices similar to what was observed with Bitcoin earlier this year.
The SEC’s request for exchanges to refine their filings for spot Ether ETFs demonstrates a step forward in the approval process. Despite this progress, the SEC has not engaged with any applicants yet, leaving the possibility of denial open. However, the move by the SEC is seen as an indication of a higher likelihood of eventual approval, prompting positive sentiment within the market.
While optimism surrounding a spot Ether ETF persisted, concerns about U.S. interest rates continued to weigh on the crypto market. Federal Reserve officials’ warnings about the need for greater confidence in easing inflation before considering interest rate cuts raised uncertainties. The minutes of the Fed’s late-April meeting were eagerly awaited for insights into the timeline for potential rate adjustments.
As Bitcoin retraced, broader altcoin prices also cooled off. Traders maintained a preference for Ether within the altcoin complex, with Solana falling by 0.2% and XRP shedding 0.5%. The resilience of the dollar further limited significant gains in the crypto market.
The impact of U.S. interest rates on crypto markets remains a significant factor in determining price movements and investor sentiment. While developments regarding spot ETF approvals and Federal Reserve decisions play a crucial role, ongoing concerns about inflation and interest rates continue to shape the trajectory of cryptocurrencies. Investors are advised to closely monitor these factors to make informed decisions in the ever-evolving crypto landscape.