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Bitcoin briefly touched $65,000 for the first time in about three weeks, driven by renewed interest in US exchange-traded funds (ETFs) and expectations of a Federal Reserve rate cut. The cryptocurrency surged as much as 1.2% to $65,030 on Monday before retreating slightly to $63,780 as of 9:19 a.m. in New York. Last week, Bitcoin saw a notable 7.4% increase, marking its largest weekly gain since mid-July.
Fed’s Influence on Bitcoin
Federal Reserve Chair Jerome Powell’s recent comments indicating potential rate cuts have provided a favorable backdrop for global markets, including cryptocurrencies. Powell’s signals have spurred significant activity in Bitcoin ETFs, with a net inflow of $252 million recorded on the day of his speech. This represents the highest inflow in over a month and reflects a seven-day streak of positive inflows into US spot Bitcoin ETFs.
Divergent Trends in Cryptocurrency ETFs
While Bitcoin ETFs are experiencing robust inflows, Ether-related products are facing challenges. Investment products holding Ether saw a $36 million net outflow last week, and a US spot-Ether ETF experienced a net outflow on August 23. Ether itself dropped by as much as 2.1% on Monday.
Market Reactions and Other Tokens
In addition to Bitcoin’s rise, Toncoin, associated with Telegram’s blockchain, saw losses following the detention of Telegram co-founder Pavel Durov in France. Other major cryptocurrencies remained relatively stable amid these developments.
Looking Ahead
Cici Lu McCalman, founder of blockchain adviser Venn Link Partners, anticipates that a rate cut in September could further boost Bitcoin, emphasizing that market attention remains fixed on the Fed’s next moves.
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