WASHINGTON (dpa-AFX) - Cryptocurrencies declined further by Wednesday morning as markets geared for the release of the FOMC minutes as well as the keenly anticipated comments of Fed Chair Jerome Powell from the Jackson Hole symposium thereafter. Massive outflows from Bitcoin and Ethereum Spot ETF products in the U.S. also dampened sentiment for digital assets.
The minutes of the July FOMC to be released on Wednesday afternoon is expected to reveal the extent of divergence in the monetary policy approach of the Fed members. With the FOMC decision resulting in a split vote, markets are speculating on the extent of opinion in favor of status quo and the extent of opinion in favor of a monetary easing, in the light of the subsequent release of key economic updates.
The CME FedWatch tool that tracks the expectations of interest rate traders currently shows the likelihood of a quarter-point cut by the Fed in September at 84.9 percent. It was 86.6 percent a day ago, 94.3 percent a week ago and 55.9 percent a month ago. With markets still clinging on strongly to hopes of a Fed rate cut, market spotlight has turned on the potential reaction of crypto markets to the Fed's action and guidance in September.
While an action by the Fed on expected lines or with a tinge of hawkishness is feared to trigger a post-FOMC sell-off in crypto markets, only a strongly dovish pivot is seen swinging the outlook in favor of cryptocurrencies.
Net outflows from Bitcoin-based Spot ETF products in the U.S. increased to $523 million on Tuesday from $122 million on Monday and $14 million on Friday. Fidelity Wise Origin Bitcoin Fund (FBTC) topped with net outflows of $247 million followed by Grayscale Bitcoin Trust ETF (GBTC) that recorded outflows of $116 million.
Ethereum-based Spot ETF products also witnessed net outflows rising to $430 million on Tuesday from $197 million on Monday and $59 million on Friday. Fidelity Ethereum Fund (FETH) topped with outflows of $156 million whereas Grayscale Ethereum Trust ETF (ETHE) followed with outflows of $122 million.
The decline in cryptocurrency prices contrasted sharply with the uptick in gold and the decline in the greenback. Gold Futures for December settlement are currently trading 0.94 percent higher at $3,390.20. The six-currency Dollar Index which measures the Dollar's strength against a basket of 6 currencies has declined 0.10 percent overnight to 98.16.
Amidst the lingering anxiety, overall crypto market capitalization has declined 1.66 percent overnight to $3.82 trillion. Only 7 of the top 100 cryptocurrencies are trading with overnight gains of more than 1 percent. The 24-hour trading volume has however increased 17.3 percent overnight to $190 billion.
Despite the decline in market capitalization, Bitcoin is ranked 7th and Ethereum 24th in the global ranking of all assets as per market capitalization compiled by companiesmarketcap.com.
Amidst the broad market weakness, Bitcoin's crypto market dominance stands at 59 percent while Ethereum accounts for 13.2 percent of the overall crypto market. The residual altcoins account for a 27.8-percent share of the overall crypto market.
The CMC Crypto Fear and Greed Index, a proprietary tool developed by CoinMarketCap to measure the emotional state of the market slipped further in the neutral territory with a plunge to 45. The reading was at 53 a day earlier.
Bitcoin declined 2.1 percent overnight to trade at $112,616.86. It is currently trading 10 percent below the all-time-high of $124,457.12 recorded on August 14. The original cryptocurrency traded between $115,388.91 and $112,578.67 during the past 24 hours. The leading cryptocurrency is trading with losses of 7.3 percent over the 7-day horizon and 5.3 percent over the 30-day horizon. Year-to-date gains have fallen to a little more than 20 percent.
Ethereum slipped 3.3 percent overnight to trade at $4,135.42. Ether has lost 12 percent in the past week. Gains in 2025 now stand at a little more than 24 percent. Ether's current trading price is 15 percent below its all-time-high. The 24-hour trading range was between $4,306.75 and $4,064.97.
3rd ranked XRP shed 4.9 percent overnight to trade at $2.84, around 26 percent below the all-time high. 5th ranked BNB lost 1.9 percent overnight at its current trading price of $825.27. The price of 6th ranked Solana decreased 1.2 percent overnight to $179.30. SOL is saddled with year-to-date losses of 5.2 percent. 8th ranked TRON slipped 0.46 percent overnight and is currently changing hands at $0.3488. Dogecoin regained the 9th rank overall despite an overnight decline of more than 4 percent and is currently changing hands at $0.2101. 10th ranked Cardano plunged 7.6 percent overnight to trade at $0.8477.
98th ranked MemeCore (M) topped overnight gains among the top 100 cryptocurrencies with a gain of 21.8 percent. 38th ranked OKB(OKB) followed with gains of 6.7 percent.
50th ranked Pudgy Penguins (PENGU) topped overnight losses among the top 100 cryptocurrencies with a decline of more than 8 percent.
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