Crypto
Bitcoin surpasses $62K amid cooler job report and dovish FOMC signals, hinting at a gradual market recovery with institutional interest.
By Bill Bullington
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Following a period of volatility and uncertainty, the cryptocurrency market witnessed a significant rebound, led by Bitcoin's (BTC) impressive surge of almost 5% to briefly surpass the $62,000 mark. This rally was primarily fueled by the cooler-than-expected U.S. April jobs report, which reported the addition of 175,000 jobs against the anticipated 245,000. This development eased concerns about imminent higher interest rates, propelling Bitcoin to $61,600, marking a 4.4% increase. Ether (ETH) also saw a notable recovery, reclaiming the $3,000 level with a 3% rise, while major altcoins like dogecoin (DOGE), shiba inu (SHIB), and Near Protocol's NEAR experienced jumps between 5%-10%.
The unexpected jobs data shifted market sentiments significantly, increasing the odds for at least one rate cut by September to 68%, up from 57% a week ago, as per CME FedWatch data. This shift comes after a period where Bitcoin's correction was closely tied to concerns over the Federal Reserve's hawkish stance on inflation, which bolstered the U.S. dollar index to its highest level since November, typically a bearish signal for cryptocurrencies. However, the Federal Open Market Committee's (FOMC) recent dovish statements, indicating a tapering of the quantitative tightening (QT) campaign, have been interpreted as positive signals for the crypto market, suggesting a peak in the USD's upward momentum against crypto pairs.
The market dynamics were further influenced by significant ETF outflows, with 11 spot bitcoin ETFs experiencing a combined net outflow of $563.7 million, marking the highest daily figure since their listing in January. Despite these outflows, BlackRock's head of digital assets, Robert Mitchnick, predicts a new wave of inflows from institutional investors such as sovereign wealth funds, pension funds, and endowments, indicating a rekindled interest in Bitcoin's potential role in portfolio construction. This anticipated shift suggests a growing institutional appetite for Bitcoin exposure through ETFs, potentially reshaping market dynamics in the months ahead.
David Han and David Duong, Coinbase (Bullish on Cryptocurrency):
"We believe that the FOMC’s more dovish-than-expected statement has signaled the peak in the USD’s upward momentum against both FX [foreign currencies] and crypto pairs."
Arthur Hayes, former CEO of BitMEX (Bullish on Bitcoin):
"Did bitcoin hit a local low [...] earlier this week," asked Hayes. "Yes," he concluded. "I expect prices to bottom, chop, and begin a slow grind higher." "A rally to above $60,000 and then range-bound price action between $60,000 and $70,000 until August."
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