Bitcoin slid 3.5% to $62,464 on Friday, failing to join the solid stock market rally that lifted the S&P 500 by 1.7% and the Nasdaq by 2.8%. This dip capped a mixed end to July, with crypto markets showing signs of strain despite Bitcoin's 4.3% gain for the month.
The Federal Reserve’s decision to hold interest rates steady at 3.50% 3.75%, marking its fifth consecutive pause, disappointed investors hoping for near-term rate cuts. The move came amid stubborn inflation, with June’s Personal Consumption Expenditures (PCE) inflation rate reported at 3.7% year-over-year, well above the Fed's 2% target. Chair Kevin Warsh made it clear the committee won’t ease up on inflation, signaling a firm stance that dampened crypto sentiment.
Market Dynamics and ETF Flows
While equities gained on strong earnings and a solid 3.0% GDP growth in Q2, cryptocurrencies struggled without a similar catalyst. Total crypto market capitalization dropped 2.3% to $2.24 trillion. Meanwhile, despite a net inflow of $233.1 million into spot Bitcoin ETFs on Thursday the largest in over three weeks July is shaping up as the slowest month for these products since their launch. Ethereum ETFs outpaced Bitcoin, pulling in $103.9 million in the week ending July 24, roughly triple Bitcoin’s intake.
Options traders brace for volatility in August following a $10 billion options expiry. The market's cautious stance reflects uncertainty over the Fed's next moves and persistent inflation pressures, leaving crypto investors wary as they enter the new month.
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