After surging for two days on spot bitcoin ETF euphoria, the price of bitcoin (BTC), the largest cryptocurrency by market capitalization, stalled.
BTC was recently trading at about $30,180, roughly where it stood 24 hours ago when investor optimism spiked after three financial services powerhouses, including BlackRock – the world's largest asset manager – applied for BTC spot ETFs. Bitcoin sank briefly to about $29,575 early Thursday after cryptocurrency custodian BitGo terminated its acquisition of rival Prime Trust – a rare sour note in an otherwise upbeat week – but quickly regained its perch.
In an email to CoinDesk, Edward Moya, senior market analyst for foreign exchange market maker Oanda, highlighted crypto’s recent momentum amid growing concern about central bank prescriptions to tame inflation and their impact on economic expansion.
“Wall Street is becoming a little pessimistic regarding the global growth outlook as global central bank tightening enters a new phase, which all of sudden has made crypto look a little bit more attractive,” Moya wrote, although he suggested cautiously that cryptos’ current upswing could wane.
“Bitcoin needs to lead the charge higher over the next few days for momentum buying to kick in,” Moya wrote.
Read More: BlackRock’s Bitcoin ETF Would Be a Big Deal
Ether (ETH), the second largest crypto in market value, followed a similar path to BTC, dipping around the time of the BitGo announcement via Twitter but then regaining ground to recently change hands near the $1,900 threshold it reached on Wednesday for the first time since the beginning of June. ETH was recently up a few fractions of a percentage point. Most other major cryptos were largely in the green, albeit not as impressively as the previous day. ADA and DOT, the tokens of smart contract protocols Cardano and Polkadot, were up more than 2% and 1%, respectively.
The CoinDesk Market Index, a measure of crypto markets performance, recently rose 0.2%.
U.S. stock indexes were mixed with the tech-heavy Nasdaq Composite and S&P 500 rising 0.8% and 0.2%, respectively, but the Dow Jones Industrial Average (DJIA) ticking down slightly. Investors seemed to shrug off the Bank of England’s 50 basis point (bps) rate hike, which veered from other central banks’ recent dovishness. Inflation in the U.K. remained at a stubbornly high 8.7% in May.
Crypto markets also seemed largely unimpressed by hawkish comments by Federal Reserve Chair Jerome Powell who reiterated the bank’s intent to raise interest rates later this year. The Fed halted a more than year-long streak of rate hikes earlier this month. The latest weekly jobless claims report, meanwhile, had little affect on assets, coming in just a few thousand claims higher than expectations.
In an email to CoinDesk, Bob Baxley, the CTO of decentralized finance (DeFi) infrastructure provider Maverick Protocol, noted a “narrative shift that is likely to propel the digital asset industry forward in a way that just wasn’t on our collective radar only a week or so ago.”
“It’s almost certain that a bitcoin ETF will get approved – either BlackRock’s or any of the flurry of other recent filings – and it’s clear that a large number of heavyweights in traditional finance want exposure to the digital asset industry more generally,” Baxley wrote, adding that he will also be interested to see how Ethereum performs in upcoming months.
“There’s just so much energy in this ecosystem given the tremendous amount of developer activity across a growing number of functionalities,” he wrote. “You have DeFi and NFTs, of course, but also a whole host of new applications and layer 2s that are getting built out at breakneck speed.”
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