Digital assets continue to recover after a major sell-off over the weekend.
Cryptocurrency markets continued to rally on Wednesday morning after Federal Reserve Chairman Jerome Powell warned that keeping interest rates high for an extended period of time could pose risks to the U.S. economy.
“Reducing policy restraints too late or not enough could weaken economic activity and employment excessively,” Powell said in his semi-annual monetary policy report. “Further positive data will strengthen our confidence that inflation is sustainably on track to reach 2 percent.”
Powell's comments suggest the Fed may consider cutting interest rates soon if current economic trends continue.
The cryptocurrency market responded positively, with the total market capitalization of digital assets increasing by 1% in the past 24 hours, according to CoinGecko.
Bitcoin (BTC) rose 2% to trade above $58,000, while Ethereum (ETH) rose 1% to above $3,100.
Among the top 100 cryptocurrencies by market cap, Stacks (STX) performed best with a 9% daily increase, followed by Sei (SEI) at 7.5% and Floki (FLOKI) at 7.1%.
LayerZero's ZRO token has been rising consistently over the past two weeks, up 65% in two weeks and trading 3% below its all-time high of $4.57. Celestia's (TIA) token has also been the best performing of the top 100 tokens, up 25% over the past seven days.
Polkadot (DOT) also rose 0.5% over the 24 hour period to surpass $6, while Solana (SOL) rebounded 1.7% to last trade at $139.5.
Asset Issuer Files for Solana ETF
Solana's price increase follows VanEck and 21Shares filing an application with the U.S. Securities and Exchange Commission (SEC) two weeks ago for a Spot Solana exchange-traded fund (ETF).
On July 8, the Chicago Board Options Exchange (CBOE) filed 19b-4 documents with the SEC, seeking approval to list these products. The SEC is expected to rule against these funds within 240 days after the regulator officially receives the documents.
Eric Balchunas, senior ETF analyst at Bloomberg, argued that the fate of these ETFs could hinge on the outcome of the US presidential election in November.
“Looks like the Solana ETF will expire mid-March 2025,” he tweeted. “The most important thing to do until then is[ortant] The date is November. If Biden wins, these [dead on arrival]If Trump wins, [is] possibility[ible].”
Mainstream Market
U.S. stock futures remained relatively steady on Wednesday, with futures tracking the Dow Jones Industrial Average rising 0.02%, while S&P 500 and Nasdaq 100 futures rose 0.1% and 0.3%, respectively.
Investors are awaiting the release of the Consumer Price Index for June on Thursday, followed by the Producer Price Index on Friday.
