Investing.com — Prices were modest on Thursday as the cryptocurrency's recent rally driven by hype over the potential of the Spot Ether ETF was largely undermined by renewed concerns about high interest rates in the United States.
US interest rate fears caused the dollar to surge overnight, putting pressure on cryptocurrency prices in general.
Bitcoin has fallen 0.35% over the past 24 hours to $69,390 as of 9:05 a.m. ET (1:05 p.m. GMT). The world's largest cryptocurrency has returned to the trading range seen for much of the past two months after a brief spike earlier this week.
Ether, the world's second-largest token, remained near a two-month high hit earlier this week, retaining much of the gains it made on hype surrounding the possible approval of a spot ether ETF for the U.S. market, with the Securities and Exchange Commission expected to rule on the matter as early as Thursday or Friday.
Spot Ether ETF dominates market attention
Ether has risen about 5.5% in the past 24 hours to $3,878.84. Ether posted strong gains this week following reports on Monday that the SEC asked some exchanges to tweak their Spot Ether ETF filings.
While the move marked some progress toward approval of spot ETFs, it did not guarantee approval.
The SEC is expected to decide on a spot Ether ETF application by VanEck, ARK Investment Management and seven other firms on Thursday or Friday.
The approval of a spot Ether ETF in the United States could drive upside of up to 60% in the second-largest cryptocurrency over the coming months, according to QCP Capital.
The forecast reflects the market reaction seen after the spot bitcoin ETF was approved in January, the Singapore-based company said in a Telegram broadcast on Thursday. Bitcoin surged from $42,000 to more than $73,000 within two weeks of the ETF's trading starting on Jan. 11, according to CoinGecko data.
“The market is expecting fireworks with Friday's expected volatility above 100%,” QCP said.
“The VanEck ETF has been listed with DTCC and we believe it has a very good chance of being approved, with trading expected as early as next week,” he added.
Implied volatility measures the market's expectations about future price movements of a financial instrument.
Cryptocurrency prices today: Prices fall as rate uncertainty grows
The cryptocurrency market as a whole has given up much of the gains made earlier this week as hawkish signals from the Federal Reserve stoked fears that U.S. interest rates will remain high for an extended period of time.
Minutes of the Fed's late April meeting showed growing concern among policymakers about persistently high inflation, with some members signaling they were prepared to raise interest rates to curb it.
Many Fed officials also warned this week that the bank has little confidence that inflation is steadily easing toward its 2% annual target.
While further rate hikes are unlikely, the Fed's plans to begin cutting rates are likely to be delayed if inflation remains subdued. Higher long-term interest rates bode ill for the cryptocurrency market, given that the sector typically thrives in low interest rates and highly liquid markets.
Altcoin prices mostly fell on Thursday. SOL fell 2.5% and fell 1%. Among meme tokens, SHIB fell by 0.5%, while DOGE rose by 0.3%.
