Bitcoin Climbs Ahead of Federal Reserve Rate Cut

Investing.com – Bitcoin’s price climbed on Wednesday in anticipation of an interest rate cut by the Federal Reserve, while data showed improvement in capital flows into spot exchange-traded funds, aiding sentiment.

Bitcoin rose 0.6% to $59,964.0 by 09:13 ET (13:13 GMT), after flitting in a trading range of $50,000 to $60,000 for most of September.

Broader cryptocurrency prices also rose as markets positioned for lower U.S. interest rates, expected to benefit risk-driven, speculative assets.

Bitcoin ETFs See Inflows After Two Weeks of Outflows

Data this week showed BlackRock’s iShares Bitcoin Trust saw its first day of inflows in two weeks on Monday, breaking a sustained run of outflows seen since mid-August.

The inflows marked a turnaround in sentiment after uncertainty over the U.S. presidential election, interest rates, and a potential recession weighed heavily on crypto prices across the board.

However, trading volumes in U.S. Bitcoin ETFs remained well below highs seen earlier this year, as enthusiasm over the ETFs waned, especially among retail traders.

Microstrategy Buys More Bitcoin, to Issue More Debt

Software firm MicroStrategy Incorporated (NASDAQ:MSTR) bought about $1.1 billion worth of Bitcoin between August 6 and September 12, the company disclosed last week, further solidifying its position as the biggest corporate holder of the token. The company holds about $9.5 billion worth of Bitcoin.

This week, the company announced plans to raise about $700 million through a private issuance of convertible bonds due 2028, which will be used to redeem earlier debt obligations and buy more Bitcoin.

Crypto Price Today: Altcoins Advance, Fed Rate Cut Awaited

Broader cryptocurrency prices drifted higher in anticipation of a widely expected interest rate cut by the Federal Reserve later on Wednesday.

World no.2 crypto Ether fell 0.4% to $2,319.94, while altcoins XRP, Solana, and Cardano moved in a flat-to-low range. Among meme tokens, Dogecoin added 0.25%.

The Fed is expected to cut interest rates at the conclusion of a meeting later on Wednesday; CME Fedwatch showed growing bias toward a bigger cut in recent sessions.

Lower rates free up liquidity to be deployed into risk-driven, speculative assets such as crypto.

Australia’s Central Bank Shifts Focus from Retail to Wholesale CBDC Development

In other developments, Australia’s central bank plans to shift its focus from developing a consumer-facing retail Central Bank Digital Currency (CBDC) to a wholesale CBDC, discussed by Financial System Assistant Governor Brad Jones at a fintech conference in Melbourne.

Unlike a retail CBDC for everyday transactions, a wholesale CBDC would facilitate transactions between banks and financial institutions, including cross-border payments. Jones emphasized that the bank sees “the benefits to the economy as more promising, and the challenges less problematic, for a wholesale CBDC compared to a retail version.”

Additionally, the Reserve Bank of Australia has committed to a three-year research initiative called Project Acacia, exploring the future of digital money including wholesale central bank digital assets and tokenized commercial bank deposits, aiming to understand how concepts like “programmability” and “atomic settlement” could benefit the Australian economy.

_Ambar Warrick contributed to this report.