The price of bitcoin (BTC) appeared set to retake the $27,000 level early Wednesday, but the rally was turned back alongside a renewed slide in the U.S. stock market.
In mid-afternoon action, the S&P 500 and Nasdaq were each lower by about 0.6% – by themselves, not large declines, but both indexes are now lower by about 10% since the start of August.
Bitcoin is flat over the past 24 hours just shy of $26,200, but earlier in the day had risen above $26,800. The CoinDesk Market Index (CMI) is higher by 0.15%.
Rising rates not necessarily bad for bitcoin
Although interest rates are continuing to trend upwards, which in theory should put pressure on the price of bitcoin, some have argued that the typical relationship between interest rates and bitcoin is breaking down, while others believe there's a bullish argument to be made about bitcoin based on its technical aspects.
"Crypto summer started in June and goes till next June. And that is a slow but steady increase back to fair value," he said. "We start with the halving, pushing us from summer to fall. That’s the parabolic time when people go crazy and buy with leverage."
The decline today in equity markets came as the 10-year Treasury yield surged another nine basis points to a fresh 16-year high of 4.63%. Alongside the rise in interest rates, the price of oil was ahead by more than 3.5% to a new 2023 high of $93.53 per barrel. The term “stagflation” – suggesting a combination of slow growth and fast inflation in the economy – hasn’t been seen a lot since the 1970s, but quickly rising rates and oil prices are likely to spark an increase in usage.
To wit, a Wall Street Journal survey showed 41% of U.S. chief financial officers (CFOs) as trimming capital spending plans and 42% cutting back on operational costs in response to higher rates. A previous survey conducted in the fourth quarter of 2022 showed just 30% as planning on cutting capital spending and 27% looking to trim operational costs.
Don't hold your breath on ETFs
In addition to delays on decisions for a couple of spot bitcoin ETFs announced yesterday, the SEC on Wednesday extended deadlines on decisions on spot ether ETFs filings from ARK Invest and VanEck.
The looming government shutdown likely forced the SEC’s hand in announcing these delays earlier than necessary as the agency will be working with a skeleton staff in the event of a shutdown.
Alongside that news, the SEC also said it’s begun consideration of a spot bitcoin ETF application from Franklin Templeton.
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