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- Bitcoin Crosses $61K as Traders Remain Cautious Ahead of U.S. CPI, Further Unwinding of Yen Carry Trade
Bitcoin Crosses $61K as Traders Remain Cautious Ahead of U.S. CPI, Further Unwinding of Yen Carry Trade
Gerry Rafferty
August 14, 2024
Bitcoin Crosses $61K as Traders Remain Cautious Ahead of U.S. CPI, Further Unwinding of Yen Carry Trade
In early Asian trading hours on Wednesday, Bitcoin (BTC) climbed above $61,000, leading gains among major cryptocurrencies and recovering from a significant price decline earlier this month. According to CoinGecko data, Bitcoin saw an increase of over 3%, outpacing other notable cryptocurrencies like Ethereum (ETH), Solana (SOL), Cardano (ADA), XRP, and BNB, which rose around 2.8%. Memecoins such as Dogecoin (DOGE) and Shiba Inu (SHIB) experienced a more modest increase of 1%, indicating that market sentiment was leaning away from higher-risk investments.
Despite these gains, some trading funds are approaching the market with caution as they navigate a week filled with critical economic data. "Investors remain cautious ahead of the US CPI this week," noted the crypto trading firm QCP Capital, emphasizing the importance of upcoming inflation numbers. These figures could influence whether the Federal Reserve opts for a 50 or 25 basis point interest rate cut in September, with both outcomes appearing equally likely.
Wednesday's uptick was a relief for traders who had been dealing with the aftermath of a significant 20% market-wide drop earlier in August, which was influenced by the unwinding of the yen carry trade. Some analysts caution that the impact of this trade unwinding isn't completely over. Richard Kelly, head of global strategy at TD Securities, expressed skepticism about declaring the end of this trend. He highlighted ongoing uncertainties regarding carry trades and insisted that shifts in valuations, particularly related to the yen, could have profound effects in the coming years.
Recently, the Bank of Japan (BoJ) raised interest rates for the first time in over a decade, which has unsettled global markets and risk assets like Bitcoin. The increase in rates diminishes the appeal of carry trades, leading to significant market volatility. Earlier statements from the BoJ suggest a focus on market stability, with further rate hikes deferred until next year.
Spot Ethereum ETFs record $24 million in net inflows, Grayscale’s ETHE shifts back to negative flows
On Tuesday, U.S. spot Ethereum (ETH) exchange-traded funds (ETFs) saw impressive net inflows of $24.34 million, building on positive momentum from Monday. Meanwhile, the Grayscale Ethereum Trust (ETHE) returned to negative flows after recording no activity the previous day.
ETHE was the only spot ether fund to experience outflows on Tuesday, with $31 million exiting the ETF, as reported by data from SosoValue. Despite this setback, inflows from three other ETFs helped mitigate the losses. BlackRock's ETHA led the pack with significant inflows of $49.12 million, rebounding from a day with no inflows. Fidelity’s FETH also contributed positively, logging $5.41 million in net inflows, while Inveco’s QETH added $813,690.
Despite the fluctuation in individual fund performances, the total daily trading volume for the nine spot ether ETFs reached approximately $191 million on Tuesday, down from $285.9 million on Monday. This decline in trading volume, alongside the mixed inflow data, indicates a developing landscape for spot Ethereum funds as investors navigate market conditions. While some funds thrived, others struggled, reflecting the dynamic nature of ETF investments in the evolving cryptocurrency market.
Ledger Live adds support for Revolut to increase accessibility for crypto
Revolut and Ledger have announced a new integration that enables users in select European Economic Area (EEA) countries to purchase cryptocurrencies seamlessly through Ledger Live, a software application designed for crypto portfolio tracking.
In a press release posted on August 14, Revolut highlighted that this integration would simplify crypto purchases for its users in certain EEA nations. Current Revolut customers who have completed the Know Your Customer (KYC) verification process will not need to undergo additional checks, allowing them to acquire cryptocurrencies more easily. New users can also complete the KYC process to gain access to the service using Visa or Mastercard.
Emil Urmanshin, Revolut’s general manager of crypto, stated that this collaboration is a significant step in their commitment to helping users transition to web3 technologies.
This announcement comes as part of Revolut's strategic expansion into the crypto sector, which includes the phased rollout of its own cryptocurrency exchange, known as Revolut X. This exchange has initially targeted professional traders, offering a fiat-to-crypto conversion with zero fees for market makers and a 0.09% fee for market takers.
Revolut has considered launching its own crypto exchange since 2021, actively seeking leadership to develop the initiative. As of April, the neobank boasts a valuation of $25.7 billion and serves 30 million customers globally, providing access to over 50 different tokens. This integration with Ledger signifies a notable advancement in their crypto offerings.
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