Unemployment claims fell while productivity rose – both unexpected.
Digital assets responded with an unseen shrug, mostly gaining modestly from where they were 24 hours ago.
Bitcoin, the largest cryptocurrency by market cap, recently traded at $30,374, up 1% from the same Wednesday. BTC has been on a rollercoaster ride for the past few days, albeit in the kid version, briefly surging above $31,000 on Tuesday after news revealed that Fidelity Investments would join BlackRock in the line of financial services giants, the spot bitcoin ETFs apply but slip below $30,000 on Wednesday as investors paused to consider the timing of an SEC approval and inflationary pressures.
On Thursday, Fidelity resubmitted the paperwork for its Wise Origin Bitcoin Trust, a spot Bitcoin ETF.
“Yes, interest rates in the United States could be hiked again, a recession could be nigh in both America and across Europe,” wrote Nick Rose Ntertsas, CEO and co-founder of NFT platform Ethernity, in an email to CoinDesk . “But we are also seeing central bank interventions in a number of major economies that have actually served as liquidity drivers. Risk assets in particular respond well to these liquidity plays, and Bitcoin and digital assets are no different.”
Ntertsas added: “I suspect that looking ahead we have about half a year of volatility left before we see a big upside like late 2020 and early 2021. That’s when the bitcoin halving will kick in, which means we’re on the “race.”
Ether, the second-largest cryptocurrency in market value, recently changed hands at $1,848, also up 1% from the same time Wednesday. Other major cryptos have been trading in a slightly green-tinged area, although SOL, the token on the Solano smart contracts blockchain, recently gained more than 10%.
As CoinDesk reported on Thursday, crypto traders on the Solana blockchain have followed Ethereum’s liquid staking token (LST) craze by using their SOL token derivatives to trade through a blunt re-leveraging process to achieve high returns. The emergence of the trend follows Drift Protocol’s Tuesday release of a new service known as “Super Staking,” which encapsulates the entire cycle in a one-click operation.
Equity markets presented a mixed picture, with the Dow Jones Industrial Average (DJIA) and S&P 500 rising 0.6% and 0.2% respectively on positive US economic data. Gross domestic product (GDP) for the first quarter was revised up to 2%, beating expectations of 1.4% growth. And the Labor Department said jobless claims for the week ended June 24 fell by 26,000 to 239,000, the sharpest drop since October 2021 and below expectations of 265,000.
Both numbers contradicted hopes that the economy was slowing and inflation would ease further, allowing central banks to postpone rate hikes that have weighed heavily on asset markets.
Speaking at the Banco de Espana’s Fourth Financial Stability Conference, Federal Reserve Chair Jerome Powell pointed to the central bank’s uncertainty about the appropriate inflation medicine in the coming months, despite hinting in recent weeks that the Fed could keep interest rates in will increase in the coming months.
“Nevertheless, inflationary pressures remain elevated and there is still a long way to go to bring inflation back to 2 percent,” Powell said, adding, “We are seeing the impact of our monetary tightening on demand at the highest interest rates.” “ – sensitive sectors of the economy, especially housing and investment. However, it will take time for the full impact of monetary policy dovishness to be felt, particularly on inflation.”
In an email to CoinDesk earlier this week, Toronto-based crypto platform CEO Stephane Ouellette wrote that BlackRock and other ETF applications have boosted markets. “In our view, the biggest added value for the industry from a US-domiciled spot ETF is that despite the bear market and an awful 18 months of headlines, some of the most respected trading firms in the world continue to enter this space,” Ouellette wrote.
Ouelette added, “Retail has even more opportunities to passively participate in BTC. While some US-based retail investors may now be able to buy the US ETF through their basic brokerage accounts, we consider the continued acceptance of this asset class by the likes of Blackrock and Fidelity to be the real story.
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