As Bitcoin (BTC) trades near $61,000, traders are eagerly awaiting insights from the Federal Reserve’s Jackson Hole symposium, set for later today. The outcome could have significant implications for risk assets like Bitcoin.
Bitcoin Holds Steady Ahead of Jackson Hole
In the past two weeks, Bitcoin has fluctuated between $59,000 and $61,000. Traders are now focusing on the upcoming comments from Fed Chair Jerome Powell, hoping to gain clues on the Fed’s future monetary policy. The impact of these remarks could either boost or undermine Bitcoin’s price.
Meanwhile, major cryptocurrencies like Ether (ETH), Solana (SOL), BNB Chain’s BNB, and XRP have seen little change, moving less than 2% in the last 24 hours. Cardano’s ADA gained 3%, and Avalanche’s AVAX surged 10% following its addition as a network option for Franklin Templeton’s OnChain U.S. Government Money Market Fund (FOBXX). This fund, launched in 2021, became the first money market fund to use a public blockchain for transaction and ownership records.
Mixed Signals from ETF Inflows
U.S.-listed Bitcoin exchange-traded funds (ETFs) recorded $64 million in inflows, marking a six-day winning streak. BlackRock’s IBIT led with $75 million in inflows. However, some analysts view the slowdown in the rate of these inflows as a bearish sign.
In contrast, Ethereum ETFs have faced continuous outflows, losing over $800,000 on Thursday alone. This marked a dismal first month for Ethereum-tracking products, with cumulative outflows exceeding $458 million since their launch on July 23.
Fed’s Monetary Policy in Focus
Many market participants are looking to the Jackson Hole meeting for signals on the Federal Reserve’s monetary policy. The direction of these policies will likely influence risk assets, including Bitcoin. Recent revisions to U.S. non-farm payrolls highlighted a weaker labor market, raising concerns that the Fed might delay rate cuts. However, July’s FOMC minutes revealed that some policymakers were open to rate cuts, sparking hope for a more dovish approach.
Attention is now on Fed Chair Powell’s speech, where traders will be looking for any indication of upcoming rate cuts. Historically, such announcements have boosted bullish sentiment, as lower borrowing costs often fuel growth in riskier sectors.
However, some experts advise caution. Augustine Fan, head of insights at SOFA, told CoinDesk that Powell might not fully commit to the four rate cuts priced into the market by year-end. “Jackson Hole has typically been positive for risk assets, so expect traders to buy on dips,” Fan noted.
