Bitcoin’s Upward Momentum Stalls Amid Speculation of BOJ Rate Hikes
The latest prices in the crypto market have shown some interesting movements. The CoinDesk 20 Index is currently at 1,857.87, marking a 0.73% increase. Bitcoin (BTC) is priced at $59,022, reflecting a 0.84% rise. Meanwhile, Ether (ETH) is valued at $2,506, experiencing a slight decrease of 0.53%. Looking beyond the crypto realm, the S&P 500 stands at 5,648.40, showing a 1% increase, and gold is at $2495.38, down by 0.07%. The Nikkei 225 index is at 38,686.31, showing a minor decrease of 0.04%.
Bitcoin’s price surged above $59,000 recently, although this uptrend was tempered by speculations of potential interest rate hikes in Japan. Despite this, BTC has managed to maintain a 1% gain over the last 24 hours, with the broader crypto market also seeing an uptick of around 0.9% as per the CoinDesk20 Index. The upcoming release of U.S. economic data, starting with the Institute of Supply Management’s manufacturing purchasing managers’ index for August, could influence market dynamics. A weak economic report could potentially push the Federal Reserve towards interest rate cuts, which might favor riskier assets like cryptocurrencies.
Bank of Japan Governor Kazuo Ueda has reaffirmed the central bank’s intent to raise interest rates further if economic conditions and inflation progress as anticipated. Ueda highlighted the accommodative economic environment, with inflation-adjusted interest rates still in the negative territory post a recent increase in the benchmark borrowing cost. This move triggered unwinding of yen carry trades, impacting risk assets. The tightening monetary policy by the Bank of Japan poses a challenge for risk assets, especially with the U.S. Federal Reserve likely to initiate rate cuts in September.
In another development, Japanese investment advisor Metaplanet, which integrated bitcoin as a reserve asset earlier this year, has partnered with SBI VC Trade to offer custody services. SBI VC Trade, a subsidiary of SBI Holdings in Tokyo, provides the opportunity to utilize BTC as collateral for financing, a move aimed at hedging against yen volatility. As of late August, Metaplanet held 360.4 BTC, equivalent to $21 million, as part of its reserve-asset strategy. This strategic approach aligns with software developer MicroStrategy, which has been accumulating bitcoin since 2020 and currently holds over 226,000 BTC, representing more than 1% of the total bitcoin supply.
The chart of the day showcases the weekly open-interest adjusted cumulative volume delta (CVD) in the top 25 cryptocurrencies by market value. Notably, XMR and APT exhibit positive CVDs, indicating net inflows into the perpetual futures market associated with these coins. Conversely, other cryptocurrencies, including BTC, have faced selling pressure. The data source for this chart is Velo Data.
In conclusion, the crypto market continues to witness fluctuations driven by various economic indicators and policy decisions, influencing investor sentiment and asset valuations.
– Omkar Godbole
