Bitcoin, Ethereum, XRP Fall Ahead of Fed Minutes. Why Rate Cuts Matter for Crypto. — Barrons.com
By George GloverBitcoin and other cryptocurrencies were falling again Wednesday as investors awaited minutes from the Federal Reserve for any clues on interest rates.The world's largest digital token by total market capitalization was down 1.5% to $113,694 over the past 24 hours, according to data from CoinDesk. It's now trading 9% off the record high it hit last week.Other cryptos were also in the red. Ethereum was down 1.6%, XRP tumbled 4.2%, and Solana slid 0.2%.It isn't a surprise that the tokens were sliding after the tech-heavy Nasdaq Composite index dropped 1.5% on Tuesday as Wall Street opted to dump some of its favorite stocks of the year. Cryptos and tech stocks tend to move in tandem as they're risk-on assets.The main factor dragging on digital assets this week has been investor uncertainty about what the Fed will do next, after wholesale inflation data came in a little hotter than expected.The central bank releases minutes from its last monetary policy meeting at 1 p.m. today which could give clues about its next move on interest rates. Traders now think there's an 85% chance it will cut rates in September, down from 94% a week ago, according to the CME FedWatch tool. When borrowing costs fall, cryptos tend to get a boost because they are more appealing compared with lower-yielding assets such bonds or cash.Investors are also weighing up a report that Treasury Secretary Scott Bessent is betting that the crypto industry can be a crucial buyer of U.S. government bonds. Bessent expects stablecoins — tokens pegged to a fiat currency like the U.S. dollar — to become a major source of demand for Treasuries in coming years, according to the Financial Times, which cited people familiar with the matter.Write to George Glover at [email protected] content was created by Barron's, which is operated by Dow Jones & Co. Barron's is published independently from Dow Jones Newswires and The Wall Street Journal.