Bitcoin Gains Momentum Amid Fed Pivot and ETF Surge, Toncoin Declines

Bitcoin Rides the Wave Bitcoin has recently expanded its rally, approaching the $65,000 mark, driven by a notable shift in U.S. monetary policy and strong inflows into spot ETFs. The world’s most renowned cryptocurrency has seen a resurgence in demand, particularly as Federal Reserve Chairman Jerome Powell hinted at a potential easing of monetary policy. In a significant speech last Friday at Jackson Hole, Powell indicated that the time might be right for a more accommodative monetary stance, indirectly pointing towards a potential interest rate cut in September. This statement spurred gains across various markets, with stocks, gold, and cryptocurrencies all showing positive responses.

Bitcoin, the largest digital asset, rose by 1.2% overnight on Monday, reaching $65,030 before slightly pulling back to below $64,000. Last week, Bitcoin saw a significant increase of 7.4%, marking its strongest weekly gain since mid-July. This surge is not only attributed to the renewed interest in Bitcoin-focused U.S. ETFs but also to a possible short squeeze that may have propelled the price further.

Powell Signals Rate Cut Jerome Powell’s remarks have provided the clearest indication yet that the Federal Reserve is on the brink of lowering interest rates from their highest levels in over two decades, which is expected to create a more favourable liquidity environment for global markets.

Powell’s signal led to a net inflow of $252 million—the highest in over a month—into a group of a dozen U.S. spot Bitcoin ETFs on the same day, according to data compiled by Bloomberg. These funds have seen consistent inflows for seven consecutive days as expectations for a September rate cut solidify.

“All eyes are on the Fed,” said Cici Lu McCalman, founder of blockchain consultancy Venn Link Partners, adding that a September rate cut could provide a significant boost to Bitcoin.

In contrast, a group of U.S. spot Ether ETFs experienced a net outflow on 23 August. Ether was in retreat on Monday, falling by as much as 1.7%. Other major cryptocurrencies showed little movement.

Toncoin Takes a Hit Meanwhile, Toncoin, a token from a blockchain associated with the messaging app Telegram, suffered losses following the arrest of its co-founder, Pavel Durov, in France. TON had recently entered an upward trend while the broader crypto market remained in a sideways movement. However, this event overshadowed the rally, leading to a sharp downturn. The TON price plummeted by nearly 15% after the news broke. Although there has been a slight recovery today, the risk of further correction remains high due to the serious nature of the allegations against Durov.