WASHINGTON (dpa-AFX) - Mounting worries about the Fed's monetary policy approach dragged down cryptocurrency prices in the past 24 hours. While outflows from Bitcoin Spot ETF products in the U.S. continued unabated, Ethereum Spot ETF products witnessed a reversal in trend, reflecting in strong inflows. In tandem, Bitcoin declined while Ethereum rallied. Bitcoin dropped below the $112k level after a gap of 18 days.
Fed Chair Jerome Powell is scheduled to address the Jackson Hole symposium on Friday morning. The subject of the current year's Economic Policy Symposium is 'Labor markets in transition: Demographics, Productivity, and Macroeconomic Policy.' The topic assumes significance given the dual mandate of pursuing the economic goals of maximum employment and price stability that has been assigned to the Federal Reserve System.
Concerns about the strength of the U.S. labor market were renewed recently with the release of monthly payrolls data that showed an addition of only 73 thousand to non-farm payrolls in the month of July, versus 110 thousand that the markets had expected. At the same time, the unemployment rate increased on expected lines to 4.2 percent from 4.1 percent in the previous month.
Meanwhile, initial jobless claims representing new claimants for unemployment benefits stood at 227 thousand during the week ended August 2 and 224 thousand during the week ended August 9. It however jumped to 235 thousand during the week ended August 16, recording the sharpest one-week count in eight weeks.
Outstanding claims denoting people who are continuing to receive benefits also rose to 1.97 million in the first week of August, surpassing expectations of 1.96 million and marking the sharpest value since late 2021.
Despite the political pressure on the Fed to ease rates, it has a delicate balancing to do, given the current elevated level of inflation. Headline annual consumer price inflation stood at 2.7 percent in July as compared with the Fed's target of 2 percent. Month-on-month headline producer price inflation also recorded a high level of 0.9 percent in July versus 0 percent a month earlier. The reading also marked the biggest increase in producer prices since June 2022.
The CME FedWatch tool that tracks the expectations of interest rate traders currently shows the likelihood of a quarter point rate cut in September at 69 percent. It was 75 percent a day ago and 85 percent a week earlier. The decline in Fed rate cut expectations has dragged down cryptocurrency prices in the past 24 hours. The decline in the stocks of the technology sector in traditional financial markets also dampened crypto market sentiment. In summary, it can be said that more than crypto-native developments, macro-economic factors have weighed on cryptocurrencies and crypto ETF products.
Net outflows from Bitcoin-based Spot ETF products in the U.S. stood at $194 million on Thursday versus $316 million on Wednesday and $523 million on Tuesday. iShares Bitcoin Trust (IBIT) topped with outflows of $128 million.
Crypto market capitalization has decreased 0.18 percent overnight to $3.84 trillion and the 24-hour trading volume has decreased 16 percent overnight to $146 billion. Among the top 100 cryptocurrencies, 19 are trading with overnight gains of more than a percent and 22 are trading with overnight losses of more than a percent.
Bitcoin, which dropped to a low of $111,986.23 in the past 24 hours is currently trading at $113,015.39, about 9 percent below the all-time-high of $124,457.12 recorded on August 14. The original cryptocurrency touched a high of $113,969.45 during the past 24 hours. The leading cryptocurrency is trading with losses of 0.31 percent in the past 24 hours, 4.9 percent over the 7-day period and 4.3 percent over the 30-day horizon. Year-to-date gains have fallen to a little above 21 percent.
Ethereum rallied 1.2 percent overnight to trade at $4,327.00. Ether has lost 6.5 percent in the past week. Gains in 2025 now stand at a little less than 29 percent. Ether's current trading price is 12 percent below its all-time-high. The 24-hour trading range was between $4,349.72 and $4,205.78.
Ethereum-based Spot ETF products witnessed net inflows of $288 million on Thursday versus net outflows of $240 million on Wednesday. iShares Ethereum Trust ETF (ETHA) topped with net inflows of $234 million.
Bitcoin continues to be ranked 7th and Ethereum 23rd in the global ranking of all assets as per market capitalization compiled by companiesmarketcap.com.
Bitcoin's crypto market dominance is currently 58.6 percent while Ethereum's share has increased to 13.6 percent of the overall crypto market. The residual altcoins account for a 27.8-percent share of the overall crypto market.
3rd ranked XRP slipped 1.3 percent overnight to trade at $2.85, around 26 percent below the all-time high. 5th ranked BNB shed 0.36 percent overnight at its current trading price of $848.76. The price of 6th ranked Solana decreased 1.1 percent overnight to $182.87. SOL is saddled with year-to-date losses of 3.4 percent. 8th ranked TRON rallied 1.1 percent overnight and is currently changing hands at $0.3571. Dogecoin, ranked 9th overall slipped 1 percent overnight and is currently changing hands at $0.2168. 10th ranked Cardano slipped 3.1 percent overnight to trade at $0.8509.
30th ranked OKB(OKB) topped overnight gains among the top 100 cryptocurrencies with a gain of 13.7 percent. 100th ranked Zcash (ZEC) followed with gains of 9.5 percent.
11th ranked Chainlink (LINK) topped overnight losses among the top 100 cryptocurrencies with a decline of 4.5 percent. 28th ranked Monero (XMR) followed with overnight losses of 3.9 percent.
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