Markets
Cryptocurrency Markets Rebound as Fed Chairman Warns of Prolonged High Interest Rates
Digital assets continue to recover after a sharp weekend sell-off.
Cryptocurrency markets continued to rally on Wednesday morning after Federal Reserve Chairman Jerome Powell warned that maintaining high interest rates for an extended period could pose risks to the U.S. economy.
“Too late or too little tapering of monetary policy could unduly dampen economic activity and employment,” Powell said. She said during its biannual monetary policy update. “Further strong data would strengthen our confidence that inflation is moving sustainably toward 2%.”
Powell’s comments suggest that the U.S. Federal Reserve may soon consider cutting interest rates if current economic trends continue.
According to CoinGecko, the cryptocurrency market has responded favorably: the overall market capitalization of digital assets has increased by 1% in the last 24 hours.
Bitcoin (BTC) saw a 2% increase to trade above $58,000, while Ethereal (ETH) rose 1% to above $3,100.
Stacks (STX) was the best-performing cryptocurrency among the top 100 by market cap, with a daily gain of 9%, followed by Sei (SEI) with 7.5% and Floki (FLOKI) with 7.1%.
LayerZero’s ZRO token has been on a steady rally over the past two weeks, posting a fortnightly gain of 65% and trading within 3% of its all-time high of $4.57. Celestia (TIA) is also the strongest performing top 100 token over the past seven days, up 25%.
Polka dot (POINT) also gained 0.5% in 24 hours to stay above $6, while Solana (SOL) recorded a 1.7% rebound and was last quoted at $139.5.
Asset issuers apply for Solana ETFs
Solana price increase follows Van Eck and two weeks ago 21Shares filed with the U.S. Securities and Exchange Commission (SEC) for the Solana spot exchange-traded fund (ETF).
On July 8, the Chicago Board Options Exchange (CBOE) filed Forms 19b-4 with the SEC seeking approval to list these products. The SEC will have 240 days to issue a ruling on the potential funds once the regulator formally acknowledges the documents,
Eric Balchunas, senior ETF analyst at Bloomberg, argued that the fate of these ETFs could depend on the outcome of the U.S. presidential election in November.
“It looks like the Solana ETFs will have a final maturity of mid-March 2025,” he said. tweeted. “From now until that moment, the most imp[ortant] the date is in November. If Biden wins, these probable [dead on arrival]If Trump wins, whatever [is] possible[ible].”
Traditional markets
U.S. stock futures were relatively flat on Wednesday. Futures tied to the Dow Jones Industrial Average rose 0.02%, while the S&P 500 and Nasdaq-100 futures gained 0.1% and 0.3%, respectively.
Investors are awaiting the June consumer price index release, due on Thursday, followed by the producer price index on Friday.