Coindesk _ Daybook
Global markets are treading water as investors wait on the
#FederalReserve ’s latest policy move, coming later today. It’s almost a given the Fed will cut interest rates by 25 basis points. Traders will instead focus on Chair Jerome Powell for signs on future policy.
The cryptocurrency market is no different. Over the last 24 hours, the CoinDesk 20 (CD20) index is practically unchanged, up just 0.2%, while bitcoin
#BTC is around 1% higher.
#GOLD , which surged to a record $3,700 this week, slipped 0.5%. The
#US dollar index added less than 0.2%.
Equities markets have barely moved as well. U.S. stocks slipped in yesterday’s session, while European equities are edging higher. The
#FTSE All-World Index advanced less than 0.1% today.
That's today. But over a longer period, cryptocurrencies have lagged behind equities.
In the last 30 days, the FTSE All-World Index rose 2.78%, while the CoinDesk 20 added 2.6% and BTC gained 1.6%. The moves suggest caution even ahead of rate cut that would boost the appeal of risk assets.
Investors are currently pricing in six interest rate cuts. Three this year, and three next year.
“Market expectations are positioned in a Goldilocks range: six cuts represent a middle ground between caution and aggression,” analysts at QCP Capital wrote in a note.
“A deviation in the dot plot, however, would challenge that balance, forcing investors to recalibrate around the risk of tighter-than-expected conditions or a Fed struggling to respond effectively to weaker growth,” the analysts added.
Markets' real test will be Powell’s press conference. A balanced message is likely to further support risk assets, while hesitation would force investors to reassess.
Despite the uncertainty, demand for spot crypto ETFs has remained robust. This week, net inflows for spot BTC ETFs are around $550 million, while spot ether ETFs brought in nearly $300 million. Stay alert!
$BTC $ETH