WASHINGTON (dpa-AFX) - Cryptocurrencies rallied in the past 24 hours, despite a mood of caution persisting in global markets ahead of the Fed's decision on interest rates as well as the release of economic projections.
Aggregate market capitalization of cryptocurrencies has increased more than 2 percent in the past 24 hours. The six-currency Dollar Index in the meanwhile edged down while gold futures declined. Yields on sovereign bonds hardened across most regions, pricing in the potential hawkishness in the Fed's forward guidance. Wall street futures are trading just below the flatline reflecting the market's anxiety.
The six-currency Dollar Index is currently trading 0.05 percent lower at 99.17 versus 99.22 at the previous close. The day's trading has ranged between 99.02 and 99.22. Gold Futures for February settlement have slipped 0.31 percent overnight to $4,223.20 per troy ounce.
Wall Street Futures are in negative territory while bond yields have hardened across most tenors and regions.
The CME FedWatch tool shows the likelihood of a quarter percentage rate cut that would slash the target funds rate to 3.50-3.75 percent at 89.9 percent. The expectation was 88.6 percent a day ago, 90 percent a week ago, and 62.4 percent a month ago. With markets overwhelmingly expecting a quarter percentage rate cut, the spotlight has shifted to the Fed's forward guidance as well as the Summary of Economic Projections that would be released simultaneously.
In the Summary of Economic Projections made in September, the Fed had raised the GDP growth projection for 2025 to 1.6 percent from 1.4 percent made in June. The Fed however maintained the unemployment rate projection for 2025 at 4.5 percent. With markets expecting the weakness in the labor market rate to goad the Fed towards monetary easing, the Fed's new projection in this regard would be keenly watched.
While making the projections in September, the Fed retained the PCE inflation projection at 3 percent and the core PCE inflation projection at 3.1 percent. With no major disappointments in the PCE-based inflation data released on Friday, the Fed's forward inflation projection in this regard assumes significance.
Given the non-interest-bearing nature of cryptocurrencies and the reduction in the opportunity cost of holding cryptocurrencies that a rate cut entails, crypto markets would also be keenly looking out for the Fed's projection about the appropriate policy path. In the projections made in September, the Fed had anticipated the Federal funds rate to fall to 3.6 percent in 2025, from 3.9 percent projected in June.
Despite uncertainty surrounding the Fed's forward guidance, crypto markets are trading with strong gains. Aggregate crypto market capitalization has increased 2.57 percent overnight to $3.15 trillion. While 63 of the top 100 cryptocurrencies are trading with overnight gains of more than a percent, 4 are trading with overnight losses of more than a percent.
Bitcoin has rallied 2.3 percent in the past 24 hours to trade at $92,335.03. The current price is around 27 percent below the all-time high of $126,198.07 recorded on October 7. The original cryptocurrency has shed 0.6 percent in the past week and is still saddled with losses of 1.1 percent on a year-to-date basis.
Ethereum jumped 6.7 percent overnight to trade at $3,315.51. Though the leading alternate coin is still trading 33 percent below the all-time-high of $4,953.73, year-to-date losses have been limited to 0.47 percent.
Market leader Bitcoin traded between $94,601.57 and $89,977.11 during the past 24 hours while leading alternate coin Ethereum ranged between $3,395.84 and $3,095.96 during the same time period.
Bitcoin is currently ranked 9th rank while Ethereum has jumped to the 34th rank in the global ranking of all assets as per market capitalization published by companiesmarketcap.com.
4th ranked XRP added 0.88 percent overnight lifting its current trading price to $2.07.
5th ranked BNB edged up 0.25 percent overnight resulting in price increasing to $888.48.
The price of 7th ranked Solana rallied 3.5 percent overnight to $137.31.
TRON ranked 8th overall lost 0.60 percent overnight and is currently changing hands at $0.2791.
9th ranked Dogecoin jumped 4.2 percent overnight and is currently trading at $0.1460.
10th ranked Cardano leaped 8.1 percent overnight to trade at $0.4637.
44th ranked MemeCore (M) topped overnight gains among the top 100 cryptocurrencies with a surge of 8.3 percent.
64th ranked Quant (QNT) topped overnight losses among the top 100 cryptocurrencies with a decline of 2.1 percent.
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