The American spot Bitcoin exchange-traded funds scored gross outflows of $200 million yesterday. The new development happens when two key economic events from the US are anticipated: the FOMC conference and the consumer price announcement. There has been a remarkable increase in US Spot Bitcoin ETF Outflow, followed by a net outflow of Ark Invest, Bitwise, VanEck, and Fidelity. Other prominent funds, including BlackRock’s IBIT, showed zero flows on Tuesday, and the spot Bitcoin ETFs concluded with outflows amounting to $64.93 million.
The market eagerly awaits the outcomes of the Federal Open Market Committee conference and the consumer price data. The recent CPI, a vital inflation indicator, will show an increase of 0.1, indicative of a wider disinflationary market trend. It is expected that the Fed will keep the current interest rate of 5.25% to 5.5% intact instead of executing a rate cut. According to a team of well-known economists, the Fed will reduce rates twice this year, beginning in September 2024.
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The Bitcoin trading revolves at $67500, a sharp decrease from the previous week’s $72000. The recent market trend is characterized by the latest outflows and market reaction. The American spot ETF market witnessed the second successive day of outflows. The outflow occurs at a time when traders are de-risking ahead of American CPI and the Fed rate decision. The prime macroeconomic reports in the US are scheduled for the upcoming Wednesday. Although it is almost certain that the Federal Reserve will keep the interest rate unchanged, investors are still apprehensive. The GBTC (The Grayscale Bitcoin Trust) witnessed the highest net outflows of $121 million.
Contracts totaling $245 million were liquidated following the recent drop, and it has been learned that the Fed Chair will officially announce the FOMC’s decision on interest rates soon. If the majority of the market participants are to be believed, there won’t be any big change in interest rates. The opinion of the Fed Chair will play a vital role in determining how the market reacts, and a lenient stance will lead to risk asset prices soaring, while a hawkish stance will spoil investor confidence. The American consumer price report is another concern for prospective cryptocurrency investors.
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A relatively higher CPI print will be influential in delaying interest rate cuts, and the FOMC will keep an eye on the core CPI. Industry reports indicate that the price of Bitcoin is largely determined by the measures taken by the Federal Reserve. It is perceived that low interest rates make risky assets like crypto more alluring to a typical investor. Some well-known anti-crypto activists requested the Fed Chair to lower interest rates significantly. They argue that the higher interest rates will hurt the American digital economy. Anti-crypto activists believe the Fed’s monetary policy won’t help reduce inflation. They point out that housing and auto insurance costs are skyrocketing due to the Fed’s monetary policy.
