Bitcoin price closed last week at ~$30,150, which was a 1.5% drop compared to the previous week, but on Thursday BTC was traded at the highest price of this year, $31,500.
This upward trend occured because of an interview with Larry Fink, CEO of BlackRock, who referred to bitcoin as “digital gold” and an “international asset”. BlackRock, one of the world’s largest asset managers, recently filed for a BTC spot ETF and is awaiting the SEC’s decision by February 2024.
After peaking at $31,500, we saw a drop to a low of $29,700 on Friday but Bitcoin recovered and stayed above 30k on the weekend.
According to Matteo Greco, Research Analyst at Fineqia International (CSE:FNQ) the price drop was attributed to the release of the US Non-Farm Payrolls data for June. While private payrolls showed a significant increase of 497,000 jobs, beating expectations of around 230,000, the data raised concerns in the financial markets. The stronger-than-expected labor market points to the potential for renewed inflationary pressures. This could mean that the FED will continue raising interest rates.
Despite the FED’s last decision to leave interest rates unchanged, the labor market and the likelihood of increaseing inflation have led the market to anticipate a 25 basis point rate hike at the upcoming FOMC meeting. In response to this central bank action, investors have engaged in portfolio and risk adjustments, leading to a decline in financial asset prices.
The cryptocurrency market, including BTC, is not immune to the impact of economic data and central bank decisions. Bitcoin’s price volatility this week reflects the market’s sensitivity to developments in traditional financial markets and macroeconomic factors. As the Federal Reserve’s actions unfold and economic indicators continue to influence market sentiment, investors will need to monitor these dynamics.
The evolving regulatory landscape surrounding cryptocurrencies, including the potential approval of a spot BTC ETF, adds further uncertainty to the market.
Editors note: at the time of writing $BTC trading at ~$30.345.
Image source: Blackrock