WASHINGTON (dpa-AFX) - Positive sentiment prevails in the cryptocurrency market even as global markets gear up for the inflation data release on Friday as well the FOMC decision on Wednesday. A recent proposal by a Fed official about giving crypto and fintech firms direct access to the central bank's payment rails boosted sentiment. Renewed trade tensions between the U.S. and China however limited gains.
The U.S. Bureau of Labor Statistics is expected to reveal on Friday the consumer price inflation readings for the month of September. Headline annual inflation is seen rising to 3.1 percent from 2.9 percent in August. The core component thereof is expected to remain steady at 3.1 percent. Month-on-month inflation is expected to remain steady at 0.4 percent whereas the core component is expected to remain steady at 0.3 percent.
Despite the anticipated uptick in headline annual inflation, rate cut expectations from the Fed remain overwhelming. The CME FedWatch tool shows a probability of 96.7 percent for the Fed to cut rates by 25 basis points next week to bring down the target rate to the 3.75 percent to 4 percent range. The probability for the Fed to cut rates by another 25 basis points in December to bring down the target rate to 3.5 percent to 3.75 percent range also remains high at 95 percent.
Market sentiment was also boosted in the wake of a recent proposal by a Fed official about 'skinny master accounts' for crypto firms. In his speech titled 'Embracing New Technologies and Players in Payments' at the Payments Innovation Conference, Federal Reserve Governor Christopher Waller proposed this payment account concept. The account would be targeted to provide basic Federal Reserve payment services to legally eligible institutions that right now conduct payment services primarily through a third-party bank that has a full-fledged master account.
Markets also analyzed claims from Google about its Willow chip making a leap in quantum computing, potentially triggering debates about the impact of the same on cryptography and Bitcoin. Google on Wednesday said its Willow quantum chip demonstrated the first-ever algorithm to achieve verifiable quantum advantage on hardware. Google claimed that it was the first time in history that any quantum computer has successfully run a verifiable algorithm that surpasses the ability of supercomputers.
Even though only ten of the top 100 cryptocurrencies are trading with overnight losses of more than a percent, the CMC Fear and Greed Index has slipped to 28 from 29 a day ago. The proprietary tool developed by CoinMarketCap to measure the prevailing sentiment in the cryptocurrency market was at 32 (fear) a week ago and 40 (neutral) a month ago.
Overall crypto market capitalization increased 1.2 percent in the past 24 hours to $3.69 trillion. 45 of the top 100 cryptocurrencies have rallied more than 1 percent in the past 24 hours. The 24-hour trading volume however decreased 17 percent to $187 billion.
Gold rebounded on Thursday amidst safe-haven demand attributed to a spike in trade tensions between the U.S. and China. Tensions resurfaced following reports about potential curbs by the U.S. on exports to China made with U.S. software. Gold futures (for December settlement) have surged 1.7 percent overnight to trade at $4,133.14 per troy ounce. Current prices imply weekly losses of 4 percent, monthly gains of 10 percent and a year-to-date surge of more than 56 percent.
The 6-currency Dollar Index which measures the dollar's strength against a basket of 6 currencies is currently at 99.106, versus 98.9 at the previous close. The index has gained 0.17 percent from the previous close.
Bitcoin is currently trading at $109,580.25 recording overnight gains of 1.5 percent. BTC has slipped 1.7 percent in the past week and 3 percent over the course of the past 30 days. Gains in 2025 are at 17.3 percent. The cryptocurrency is currently trading about 13 percent below the all-time-high of $126,198.07 recorded on October 7.
Bitcoin Spot ETF products in the U.S. witnessed outflows of $101 million on Wednesday versus inflows of $477 million on Tuesday.
Ethereum also rallied 1.4 percent overnight to trade at $3,899.68. Ether's current trading price is 21 percent below its all-time-high. The 24-hour trading range was between $3,903.06 and $3,718.08.
Ethereum Spot ETF products in the U.S. recorded outflows of $19 million on Wednesday in contrast to inflows of $142 million recorded a day earlier.
4th ranked BNB jumped 3.5 percent overnight at its current trading price of $1,099.46.
5th ranked XRP also gained 0.93 percent overnight to trade at $2.41, around 37 percent below the all-time high.
The price of 6th ranked Solana increased 2.2 percent overnight to $188.42. With losses of 0.4 percent, SOL is the highest-ranking cryptocurrency to trade with year-to-date losses.
TRON ranked 8th overall lost 0.47 percent overnight and is currently changing hands at $0.3226.
9th ranked Dogecoin added 2.1 percent overnight and is currently changing hands at $0.1951.
10th ranked Cardano gained 1.4 percent overnight to trade at $0.6410.
11th ranked Hyperliquid (HYPE) topped overnight gains among the top 100 cryptocurrencies with a gain of 10.7 percent.
30th ranked Zcash (ZEC) topped overnight losses among the top 100 cryptocurrencies with a decline of more than 12 percent.
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