Bitcoin price rose higher on Wednesday, buoyed by growing expectations of U.S. interest rate cuts as weak economic readings continued to trickle in and a resurgence in inflows to spot BTC exchange-traded funds (ETFs).
This trend also buoyed broader crypto prices, as capital flows into the space picked up over the past month. The launch of spot Bitcoin ETFs in Australia also pointed to more capital inflows in the near-term.
A decline in the dollar this week also aided crypto markets.
Bitcoin rose 3% in the past 24 hours to $70,986.9 by 09:00 ET (13:00 GMT).
Bitcoin breaks out of trading range, close to record highs
The world’s biggest cryptocurrency broke out of a $60,000 to $70,000 trading range seen since mid-March, and was now trading about $3,000 away from a new record high.
A mix of profit-taking, concerns over high interest rates and cooling optimism over Bitcoin ETFs in recent months had kept Bitcoin in a trading range after the token surged to record highs in early-March.
But interest in crypto now appeared to be picking up, especially with the prospect of lower interest rates this year.
Risk-heavy assets such as crypto usually benefit from lower interest rates, given that increased liquidity makes for more speculative trading.
Crypto price today: altcoins advance with rate cues in progress
Broader altcoin prices also advanced on Wednesday, as weak U.S. economic data spruced up expectations of eventual interest rate cuts by the Federal Reserve.
World no. 2 token Ethereum climbed 1.5%, while SOL, XRP and ADA rose between 0.9% and 5%.
Among meme tokens, SHIB surged 7.3%, while DOGE added 2.3%.
Expectations of a rate cut in September rose after softer-than-expected job openings data on Tuesday.
The reading was preceded by weak purchasing managers index data, as well as a downward revision in U.S. gross domestic product for the first quarter.
But while the readings ramped up bets on a September rate cut, focus this week was still on upcoming nonfarm payrolls data for more definitive cues on the labor market and interest rates.
Bitcoin ETFs attract $880m in a day, highest since March
U.S.-listed spot Bitcoin ETFs saw substantial inflows of more than $880 million on Tuesday, driven primarily by Fidelity, according to provisional data released on Wednesday.
Fidelity’s FBTC ETF saw the largest inflows at $378 million, followed by BlackRock’s IBIT with $270 million, and Grayscale’s GBTC with $28 million. This marked the best inflow day since March and the second-highest overall since the launch of 11 bitcoin ETFs in January.
According to a Bloomberg analyst, BTC ETFs have accumulated $3.3 billion over the past four weeks, pushing their year-to-date net inflows past $15 billion.
