Early on Wednesday, the price of bitcoin (BTC) just barely stayed above $29,000. This is because trade activity has been slow all summer, which is putting pressure on digital assets.
The market value of the most important cryptocurrency, Bitcoin, fell as low as $28,930, which was its lowest point since August 7. Before this drop, the price was at $29,400 the day before. At the time of this story, the price has come back a little bit and is just above $29,100.
In a report, Vetle Lunde, a senior expert at the digital asset company K33 Research, stated that Bitcoin prices are essentially confined to the $29,000 range and are not undergoing significant movement.
Ether (ETH), the second-largest coin, also went down in value and is now worth about $1,820. This is a drop of 0.8% in the last 24 hours. The CoinDesk Market Index (CMI) shows a 1.7% drop across the board.
Even though the market went down on Wednesday, the well-known bullish expert Tom Lee of Fundstrat Global Advisors made a very optimistic forecast. During an interview on CNBC, Lee said that he thought the price of bitcoin could go up by more than five times its current value if a spot bitcoin ETF were to be approved.
In his own words, he said, “I think the daily demand for bitcoin will be higher than the daily supply, which will cause the equilibrium price to go above $150,000 and maybe even reach $180,000.”
At the moment, the U.S. Securities and Exchange Commission (SEC) is reviewing different applications for spot BTC ETFs, including one from BlackRock, a well-known financial giant. The governing body has put off making a ruling on Cathie Wood’s ARK21 application.
SOL, DOGE, MATIC lead altcoin fall
Throughout the day, altcoins, which are a type of alternative cryptocurrency, lost a lot of value. Their performance was much worse than the drop of 1.7% in the CoinDesk Market Index (CMI) and the drops in Bitcoin (BTC) and Ethereum (ETH). Over the past 24 hours, the prices of Solana’s SOL, dogecoin (DOGE), and Polygon’s MATIC all went down by between 5% and 7%.
Ripple’s XRP, which is the fifth-largest digital asset by market capitalization, fell below 60 cents for the first time since a court decision in mid-July caused a rally. In the last 24 hours, its value went down by 4.7%, and in the last month, it went down by 19%.
Matthew Sigel, who is in charge of digital asset research at the investment management firm VanEck, pointed out that the current price trends are marked by a lack of volatility, less speculation, and less use of debt. In an interview with CoinDesk TV, he stressed that, despite the extreme events that caused big crypto lenders to go bankrupt, volatility has been going down for most of the past year.
Interest rate worries persist
The Atlanta Fed’s GDPNow model has updated its prediction for U.S. GDP growth in the third quarter to a strong 5.8% after taking into account the most recent economic statistics. This prediction is higher than the previous one, which was 5%. It means that the economy will grow faster than it has since the fourth quarter of 2021. After the Covid pandemic, the economy grew quickly during that time.
At the same time, the minutes from the July meeting of the Federal Open Market Committee (FOMC) of the U.S. Federal Reserve were made public on Wednesday. The minutes showed, among other things, that most of the officials still think inflation could go up and continue to stress the need for more rate hikes.
When these two things happened at the same time, they pushed the 10-year Treasury yield up by five basis points, bringing it to 4.27%. In 2023, this reached its highest point, coming very close to a peak that hadn’t been observed in 15 years. Because of this, stocks had more problems, and the Nasdaq index went down by 1.15 percent. This caused the Nasdaq to lose around 6% of its value over the whole month of August.