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Bitcoin (BTC) hit a low of $59,500 on Binance ahead of the Federal Open Market Committee (FOMC) meeting, as market players anticipate a hawkish stance from the Federal Reserve with no changes in interest rates.
The CME FedWatch Tool indicates a 4.4% chance of a rate cut, a shift from the previous expectation of six cuts to just one this year. This change is reflected in the market data, which now suggests a 36% chance of zero cuts in 2024, up from a mere 3% four months ago.
Stagflation Risk Looms
The US faces stagflation risks, marked by persistent inflation and slowing economic growth. The latest GDP growth and Core PCE inflation figures indicate a challenging economic landscape.
Fed Chair Jerome Powell’s outlook casts doubt on a quick economic recovery, hinting at sustained high-interest rates. Bitcoin’s recent performance reflects these uncertainties, with prices dropping due to renewed stagflation concerns.
Slowdown in ETF Inflows
Spot Bitcoin ETF inflows have slowed down, with major funds like BlackRock’s iShares Bitcoin Trust pausing inflows for the first time since launch. This slowdown has impacted Bitcoin’s price, currently trading at around $60,100.
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