Investing.com — Prices were slightly lower on Wednesday as traders locked in profits from recent gains on optimism for the spot Ether ETF on hopes of further clues on U.S. interest rates.
Ether, the world's second-largest cryptocurrency, also gave up some gains after hitting a two-month high, boosted by reports this week of progress toward the Securities and Exchange Commission's approval of spot ETFs. Regulators are expected to make a long-awaited decision on potential ETF approval later this week.
However, persistent U.S. inflation and warnings of persistently high interest rates have made traders wary of the crypto market, with Bitcoin also retreating from its recent gains.
Bitcoin has fallen 2.1% over the past 24 hours to $69,763.0 by 8:48 p.m. ET (12:48 p.m. Japan time).
Ether Retreats After Hitting Two-Month High, with SEC ETF Decision in Focus
Ether fell 3% in the past 24 hours to $3,663.08 after nearing its highest since early March. The token rose as much as 18% on Monday.
The surge was fueled by media reports that the SEC asked exchanges on Monday to tweak the Spot Ethereum ETF's filing ahead of a key approval decision expected later this week.
While this move represents some progress toward the ETF's approval, the SEC could still deny the application, given that it has not engaged with any applicants so far.
Still, analysts said the SEC's move reflects an increased likelihood that the Spot Ether ETF will eventually be approved. This approval is expected to trigger a rise in crypto prices, similar to what happened when the Spot Bitcoin ETF was approved earlier this year.
Bitcoin struggles to sustain gains as further Fed cues await
The token rose to as high as $71,000 on Tuesday before slipping back into the $60,000 to $70,000 trading range seen for most of the past two months.
Sentiment towards cryptocurrencies remained subdued by persistent concerns about US interest rates, despite optimism about the Spot Ether ETF.
Several Fed officials warned this week that the central bank needs more confidence that inflation is falling before it begins cutting rates.
Attention now turns to for further clues as to when the central bank could start cutting interest rates.
High long-term interest rates do not bode well for the crypto market, given that it limits the attractiveness of high-risk and highly speculative assets.
Cryptocurrency prices today: Altcoin rally subsides
As Bitcoin has fallen, so have the prices of altcoins in general, but within the altcoin complex traders remain heavily biased towards Ethereum. The strength of the dollar also limited significant gains in cryptocurrencies.
fell 1.6% and fell 2.3%. Memecoin and SHIB each fell 2.8%.
BlackRock (NYSE:) Bitcoin ETF sees biggest inflow since April
IBIT, BlackRock's Spot Bitcoin ETF, is seeing increased activity after a quiet few weeks as Bitcoin trades above the $70,000 level for the first time in a month.
Specifically, according to preliminary data from Far Side Investors, inflows into IBIT topped $290 million on Tuesday, the highest daily inflow to date this month and the largest since April 5. The figure is nearly triple the highest monthly inflow of $93 million recorded in 2019.
As a result, the company's total holdings have soared to more than $19 billion, as shown on IBIT's product page.
Tuesday's inflows are significantly higher than earlier this month, when IBIT had low or no inflows prior to May 15. In April, IBIT recorded its first ever outflow day, which contributed to the bear market against Bitcoin at the time.
Meanwhile, asset management company WisdomTree has received approval from the Financial Conduct Authority (FCA) to list virtual currency exchange traded products (ETPs) on the London Stock Exchange (LSE).
WisdomTree said it was one of the first applicants to have a prospectus approved by UK regulators.
Physical Bitcoin (BTCW) and Physical (ETHW) ETPs are scheduled to begin trading on May 28th and will be available only to professional investors. According to Wednesday's announcement, these ETPs will have a 35 basis point fee.
