Markets
Bitcoin Awaits PCE Inflation Report
Bitcoin consolidated above $61,000, with no clear directional bias ahead of the release of the Fed’s preferred inflation gauge, fundamental personal consumption expenditure (PCE). Economists expect the PCE to show that the annualized inflation rate slowed to 2.6% in May from 2.8%, according to Bloomberg. While this would be the lowest reading in more than two years, it is still above the Fed’s 2% target. “A lower-than-expected figure would suggest continued declines in inflation and could boost cryptocurrencies in the coming months” , said Valentin Fournier, digital asset analyst at consultancy brn.
Solana’s SOL token outperformed Ethereum’s ETH token this week after the New York-based investment management firm VanEck filed a motion an S-1 registration statement for its VanEck Solana Trust. “We believe the native token, SOL, functions similarly to other digital commodities such as bitcoin and ETH,” wrote VanEck’s head of digital assets research, Matthew Sigel, in a posted on X claiming that SOL is a commodity, not a stock. The consensus is that CME futures are a prerequisite for ETF approval, which SOL does not currently have. Meanwhile, ether futures have been trading on the CME for some time, and spot ether ETFs will likely begin trading in the U.S. in July. For now, the path of least resistance for the SOL/ETH ratio appears to be to the upside. The SOL/ETH ratio is up 12% this week, more than reversing last week’s decline in a bullish engulfing candlestick pattern.
Blockchain bettors were skeptical about President Joe Biden’s performance in the first debate of the 2024 presidential election, pushing former President Donald Trump probability of winning the November vote up to 67%. A contract asking bettors to declare the outcome of the election currently has about $188 million at stake, with about $23 million on Trump and $21 million on Biden. A Trump victory in November could signal a shift towards more favorable regulatory conditions for the cryptocurrency industry, according to analysts at Bitfinex. “A Trump administration could prioritize creating a clear and supportive regulatory framework, encouraging innovation and investment in the cryptocurrency sector. This could lead to greater adoption of digital assets and a more robust integration of cryptocurrencies into the financial system, potentially spurring further growth in the sector,” Bitfinex analysts said in an email.