Fed's rate cut sends mixed signals for Bitcoin: volatility or opportunity?

Rachael LucasSep 19th 2024

Fed's rate cut sends mixed signals for Bitcoin: volatility or opportunity?

Weekly crypto wrap: 19th September 2024

TLDR

BTC Markets partners with Real Vision to deliver crypto market insights.
Ondo (ONDO) is now live and available to buy on BTC Markets.
Fed's rate cut sends mixed signals for Bitcoin: volatility or opportunity.
BlackRock's Bitcoin ETF sees first net inflows in 14 days.
Australian inflation expectations dip slightly in September.
US Fed cuts rates by 50bps, signals further easing amid revised inflation forecasts.
China's industrial production and retail sales grow in August, missing forecasts.

BTC Markets announcements

BTC Markets partners with Real Vision to deliver crypto market insights.

BTC Markets is excited to announce a new partnership with Real Vision, a global leader in financial and cryptocurrency education. This collaboration will bring exclusive, high-quality market insights from Real Vision’s Chief Crypto Analyst, Jamie Coutts, directly to BTC Markets’ clients.

Starting this month, we will roll out Real Visions Deep Dive reports, featuring expert reports from Jamie Coutts. These reports, previously only available to Real Vision subscribers, will now provide BTC Markets' 360,000-strong user base with in-depth analysis of macroeconomic trends impacting the cryptocurrency market.

Read more about this exciting partnership here.

Read Jamie’s latest report: ‘Reality Check: Bull Market Correction.’

Ondo (ONDO) is now live and ready to trade on BTC Markets.

You can now buy and sell the ONDO/AUD pair on our platform. Explore this latest addition to our list of supported cryptocurrencies today.

What is Ondo (Ondo)?

Ondo Finance is a platform that uses blockchain technology to make financial markets more efficient, transparent, and accessible by automating processes and reducing costs.

For more information about Ondo (ONDO), please visit our blog. Follow us on X/Twitter, LinkedIn, or Facebook for all the latest updates.

BTC Markets CEO to discuss the future of crypto investment at the AFR Crypto & Digital Assets Summit.

Hosted by Emma Rapaport, Co-editor of Street Talk at The Australian Financial Review, our CEO Caroline Bowler will delve into the evolving attitudes towards crypto investment, the mechanics of Bitcoin ETFs, and their impact on the crypto market.

The discussion will also explore how investors are responding to these developments. Tune in at 11:25 am (AEST) on Monday, September 23, 2024, for this insightful session on the future of finance.

BTC Markets x Ticker News ‘Crypto Corner’ featuring Gerard Doyle.

In the latest episode of Crypto Corner, BTC Markets CEO Caroline Bowler chats with Gerard Doyle from the ASX Refinitiv Charity Foundation about the 2024 Markets Day for Charity and its $40M in donations since 1998.

This year the ASX Refinitiv Markets Day for Charity is on Tuesday, 15th October 2024. We’re honoured to support this key event alongside industry leaders like ASX, NABtrade, Macquarie Bank, and Citi.

Get involved by trading on the day with BTC Markets and we will contribute 100% of the trading profits from the day to these important causes.

Watch on YouTube or Ticker News.

Unpacking the ATO’s latest guidance on crypto taxes for DeFi with Crypto Tax Calculator.

Our Head of Finance, Charlie Sherry, catches up with Patrick McGimpsey from Crypto Tax Calculator to talk about the latest guidance from the Australian Taxation Office (ATO) on the taxation of Decentralised Finance (DeFi).

Watch the video here.

Plus, use our exclusive discount code BTC30 to enjoy a 30% saving on all CTC plans before 31 October 2024. View more details here.

Learn: Start your crypto journey with BTC Markets' beginner's guide.

Explore the world of cryptocurrencies with BTC Markets' beginner's guide. Our Learn Section is crafted specifically for newcomers eager to understand the crypto space.

What you’ll find in our Learn Section:

Introduction to cryptocurrencies: Explore the fascinating world of cryptocurrencies and their potential role in the future of finance.
Getting started in crypto: Learn the basics about crypto wallets, exchanges and creating an account.
How to buy and sell crypto: Learn how to buy, sell, and store crypto on an exchange, and secure your assets with best practices.
How to stay safe in crypto: Stay safe in the crypto space by understanding the common scams and how to avoid them.
Crypto tax requirements: Understanding the regulatory landscape and tax reporting requirements for crypto.

Visit our Learn Section today and start your journey towards becoming a confident and informed crypto enthusiast. With BTC Markets, the future of finance is at your fingertips.

Explore now.

Mobile app fiat and crypto withdrawals.

Did you know that you can now easily withdraw fiat and cryptocurrency using our latest mobile app update?

This feature allows you to effortlessly manage your withdrawals and track transfer statuses through a comprehensive history list.

The feature is live in the most recent app release. Update your mobile app from the App Store (iOS) or Google Play Store (Android). Discover more about this exciting mobile app update here.

State of crypto

TLDR

Fed's rate cut sends mixed signals for Bitcoin: volatility or opportunity.
BlackRock's Bitcoin ETF sees first net inflows in 14 days.
Solo staking is key to Ethereum's security according to co-founder, Vitalik Buterin.
Worldcoin’s World ID bridges to Solana via Wormhole.
MoviePass teams up with Sui for USDC payments and blockchain features.

The weekly trading stats as of Monday, September 16th at 10:00 am AEST, based on data from Tradingview in USD.

Fed's rate cut sends mixed signals for Bitcoin: volatility or opportunity?

The Federal Reserve's unexpected 50 basis point rate cut, doubling expectations, reflects growing concerns about the U.S. economy's health. This aggressive monetary easing, while typically positive for assets like Bitcoin due to inflationary effects, signals deeper economic trouble that could trigger market volatility.

Bitcoin, often seen as a hedge against central bank mismanagement, may benefit from the weakening dollar in the long term. However, the immediate implications of the rate cut could bring short-term turbulence as investors reassess broader macroeconomic risks, including potential recessions in the U.S. and globally.

Buy BTC/AUD on BTC Markets.

BlackRock's Bitcoin ETF sees first net inflows in 14 days.

BlackRock's iShares Bitcoin Trust (IBIT) recorded its first net inflow in 14 days, attracting US$15.8 million on Monday. This ended a streak of 13 days characterised by flat or negative flows, during which the fund saw total net outflows of US$23.1 million. Despite this downturn, IBIT's overall performance remained strong, managing over US$20 billion in assets under management. In contrast, the ten U.S. based spot Bitcoin ETFs collectively saw outflows totalling approximately US$770 million since August 27.

The recent declines in Bitcoin prices, which fell 9% in August and continued to drop in early September due to uncertainties in global markets, the U.S. presidential election, and impending Federal Reserve interest rate decisions, contributed to this trend. However, the price of Bitcoin has since rebounded, reaching around US$60,000 on Tuesday for the first time since late August. This resurgence likely helped boost confidence in the market, positively influencing IBIT's inflows.

Source: TheBlock.co

Solo staking is key to Ethereum's security according to co-founder, Vitalik Buterin.

At Ethereum Singapore 2024, Vitalik Buterin emphasised the importance of solo staking for Ethereum's security and decentralisation. Solo stakers are the individuals who independently stake their Ether without relying on third-party services, centralised entities, or staking pools. Buterin noted that solo stakers provide a diverse and decentralised defence against attacks, which is vital for Ethereum’s long-term sustainability.

He also addressed the risk of 51% attacks, where a malicious entity could potentially compromise the blockchain's security. Buterin proposed raising the block finality threshold from the current two-thirds to a higher percentage, such as three-quarters, to make such attacks more difficult.

Ethereum's price against Bitcoin has hit a 42-month low, raising concerns of further declines. Analysts like Alex Thorn and Fred Krueger suggest Ether is under pressure due to negative ETF flows, with US$581 million in outflows. However, some see potential for recovery based on historical patterns and oversold conditions.

Trade ETH/AUD on BTC Markets.

Worldcoin’s World ID bridges to Solana via Wormhole.

On September 13, Worldcoin announced the integration of its World ID with the Solana blockchain via a new cross-chain protocol from the Wormhole Foundation.

World ID, built on Worldcoin’s layer 2 Ethereum chain, serves as a privacy-enabled human verification service for secure logins to decentralised applications (DApps). Its recent integration with the Solana network allows developers to easily implement World ID authentication, enhancing cross-chain compatibility.

Robinson Burkey, co-founder of the Wormhole Foundation, highlighted this as “a big step forward for identity verification”, promoting trust in decentralised ecosystems. As of July 31, 2024, Worldcoin had over 6.6 million users, with steady growth since its July 2023 launch. The platform has expanded its operations to Austria and established partnerships in Southeast Asia, including a collaboration with the Malaysian government.

Buy SOL/AUD on BTC Markets.

MoviePass teams up with Sui for USDC payments and blockchain features.

MoviePass has partnered with the Sui Foundation to integrate USDC stablecoin payments for subscriptions, marking a further step in its crypto pivot.

Announced at Token 2049 in Singapore, the collaboration also includes the Sui Foundation taking an equity stake in MoviePass. This partnership aims to offer USDC payments soon, with additional features, like on-chain rewards and digital collectibles, launching next year.

MoviePass co-founder Stacy Spikes highlighted that blockchain tech will enhance moviegoing experiences by increasing accessibility and fan engagement. MoviePass's path to profitability was supported by venture capital from the crypto sector, with Animoca Brands leading a seed funding round for an undisclosed amount.

Trade SUI/AUD on BTC Markets.

Crypto Fear & Greed Index

Source: alternative.me

The week ahead: economic events

Thursday, September 19th:

United States Fed Funds Interest Rate.

Friday, September 20th:

Japan Inflation Rate YoY and BoJ Interest Rate Decision.
United Kingdom Retail Sales MoM.

Monday, September 23rd:

Germany Manufacturing PMI.

Tuesday, September 24:

Australia Interest Rate.
Germany Ifo Business Climate Index.

Wednesday, September 25th:

Australia Monthly CPI Indicator.

Source: trading economics

Market reflections

Overview

In September, Australian inflation expectations eased to 4.4% as the RBA considered policy adjustments. The US Fed cut rates by 50bps, with further easing expected, while US building permits, retail sales, and consumer sentiment rose unexpectedly. China's industrial production and retail sales missed forecasts in August, and Germany's economic sentiment hit its lowest point since October 2023. Japan's trade deficit narrowed but remained below expectations.

Australia

Australian inflation expectations dip slightly in September.
The Reserve Bank of Australia weighs monetary policy.

Australian inflation expectations dip slightly in September, as RBA weighs monetary policy.

In September, Australian consumer inflation expectations edged down to 4.4% from August's four-month peak of 4.5%. This reflects the Reserve Bank of Australia’s (RBA) efforts to curb inflation while maintaining employment gains.

Although inflation has moderated from its peak, it remains above the RBA’s 2–3% target, leading Governor Michele Bullock to caution against premature monetary easing.

Australia's headline inflation increased to 3.8% in Q2 2024, up from 3.6% in Q1, marking its first rise since Q4 2022. July’s CPI index showed a year-on-year increase of 3.5%, a slowdown from June’s 3.8%, attributed to the ongoing Energy Bill Relief Fund rebate.

Global

US Fed cuts rates by 50bps, signals further easing amid revised inflation forecasts.
Building permits, retail sales and consumer sentiment rise in the US, defying expectations.
China's industrial production and retail sales grow in August, missing forecasts.
Germany's economic sentiment plummets to lowest since October 2023.
Japan's trade deficit narrows in August, below forecasts.

United States

US Federal Reserve cuts rates by 50bps, signals further easing in 2024 amid revised inflation forecasts.

In September, the US Federal Reserve (Fed) cut the federal funds rate by 50 basis points to a range of 4.75%-5%, marking the first-rate reduction since March 2020. The decision, while widely expected, followed speculation about a possible 25 bps cut.

The Fed also released new economic forecasts, indicating 100 bps of additional cuts by year-end, followed by further easing in 2025 and 2026. Inflation projections were revised lower, with PCE inflation now expected to be 2.3% in 2024 and 2.1% in 2025.

Core inflation forecasts also decreased, while GDP growth for 2024 was slightly revised down. Unemployment is expected to rise to 4.4% this year and next. The Fed remains committed to achieving 2% inflation and maximum employment, with the committee closely monitoring economic conditions for further rate adjustments.

U.S. building permits rise in August, reaching a five-month high.

Building permits in the United States increased by 4.9% to a seasonally adjusted annual rate of 1.475 million in August 2024, surpassing market expectations of 1.41 million. This marks the highest level in five months, with multi-unit approvals rising by 8.4% to 451,000 and single-family authorisations up by 2.8% to 967,000.

US retail sales rise 0.1% in August, defying expectations.

In August, US retail sales increased by 0.1% month-over-month, following an upwardly revised 1.1% gain in July and surpassing forecasts of a 0.2% decline. This indicates ongoing strength in consumer spending.

Consumer sentiment in the US rises in September, driven by improved buying conditions.

In September, the University of Michigan consumer sentiment index increased to 69, its highest level since May, surpassing August’s 67.9 and beating forecasts of 68. This gain was primarily attributed to improved buying conditions for durable goods, influenced by more favourable pricing.

Both current conditions and expectations indices also rose, with the current conditions gauge up to 62.9 from 61.3 and the expectations gauge increasing to 73 from 72.1, exceeding forecasts. Year-ahead inflation expectations decreased slightly to 2.7% from 2.8%, while the five-year outlook rose to 3.1% from 3.0%.

Despite a slight decline in views on labour markets, expectations for personal finances and the overall economy improved.

US factory gate prices rise in August, with mixed impacts on goods and services

In August, US factory gate prices increased by 0.2% month-on-month, surpassing the forecast of 0.1% and recovering from a flat reading in July.

Year-on-year, producer prices rose 1.7%, falling short of the revised 2.1% increase in July and the 1.8% forecast. Core CPI rose by 0.3%, exceeding forecasts and reversing a 0.2% decline in July, with the annual core rate steady at 2.4%.

China

China's industrial production grows in August, missing forecasts amid ongoing slowdown.

China's industrial production rose by 4.5% year-on-year in August, falling short of the expected 4.8% and slowing from a 5.1% increase in July. This marks the softest expansion in industrial output since March and the fourth consecutive month of deceleration, largely due to disruptions from extreme weather.

Manufacturing output increased by 4.3%, down from 5.3% in July, while mining output rose by 3.7%, down from 4.6%. Monthly industrial output added 0.32%, the smallest increase in three months, with a cumulative rise of 5.8% for the first eight months of the year.

China's retail sales grow in August, missing expectations amid weather-related disruptions.

In August, China's retail sales expanded by 2.1% year-on-year, a slowdown from July's 2.7% growth and below the market consensus of 2.5%. This moderation was influenced by extreme weather conditions, including heatwaves and heavy rains.

Retail trade showed minimal growth month-on-month after a 0.35% rise in July, with retail sales up by 3.9% for the January to August period.

Germany

Germany's ZEW economic sentiment plummets in September, lowest since October 2023.

Germany's ZEW Indicator of Economic Sentiment fell sharply to 3.6 in September, the lowest level since October 2023, down from 19.2 in August and below the forecast of 17.

This decline marks the third consecutive month of decreasing economic sentiment, reflecting a significant loss of optimism since November 2023.

ZEW President Achim Wambach noted that the anticipation of a quick economic recovery is fading, with optimism and pessimism now evenly balanced. Additionally, the current conditions index dropped to -84.5, the lowest since May 2020, from -77.3.

Japan

Japan's trade deficit narrows in August, below forecasts.

In August, Japan's trade deficit narrowed to JPY 695.3 billion, down from JPY 940.1 billion a year earlier, but remained above market expectations of JPY 1,380 billion.

Exports grew by 5.6% to JPY 8,441.88 billion, marking the ninth consecutive month of increases but falling short of the 10.0% forecast.

Imports rose by 2.3% to JPY 9,137.18 billion, the slowest increase in five months and below the projected 13.4% rise.

United Kingdom

UK inflation holds steady in August, with airfares and recreation driving up costs.

The UK's annual inflation rate remained unchanged at 2.2% in August, matching July's rate and expectations. Key upward contributors included a sharp rise in airfares primarily for European routes, and faster price increases in recreation and culture. On a monthly basis, the CPI rose by 0.3%, following a 0.2% decrease in July, aligning with forecasts.

European Union

ECB lowers deposit rate to 3.5% to manage inflation.

In September, the European Central Bank (ECB) reduced its key deposit facility rate by 25 bps to 3.5%, following a similar cut in June. The move aims to ease monetary policy amid updated inflation projections and improved policy transmission.

The ECB also lowered rates on main refinancing operations and the marginal lending facility. Inflation forecasts remain at 2.5% for 2024, 2.2% for 2025, and 1.9% for 2026, with core inflation expected to decrease to 2.0% by 2026. Despite ongoing domestic inflation pressures, moderating labour costs provide some relief.

Canada

Canada's annual inflation slows in August, meeting central bank target.

Canada's annual inflation rate decreased to 2% in August, the lowest since February 2021 and slightly below the forecast of 2.1%. This marks the first time in over three years that inflation has met the central bank's target.

The slowdown was driven by a 5.1% drop in gasoline prices, influenced by lower current prices and base-year effects, and an eighth consecutive month of declines in clothing and footwear prices, down 4.4%. Shelter costs, which make up about 30% of the CPI basket, increased by 5.3%, easing from 5.7% in July. Excluding gasoline, the CPI rose 2.2%, down from 2.5% in July.

Core price measures also reached their lowest level in 40 months. On a monthly basis, the CPI fell by 0.2% in August, contrary to expectations of no change, following a 0.4% rise in July.

Scam awareness

Unmasking the most common crypto scams.

The rise of cryptocurrencies has brought about revolutionary opportunities and possibilities. However, with every technological advancement comes a flip side – an increased risk of scams and fraudulent activities.

Scammers are becoming more cunning and sophisticated in their tactics. Let’s look at the most common crypto scams.

Read the full blog here.

The ASIC provides a checklist of common scams and ways to avoid them. To learn more, visit ASIC’s website.

Discover more on our ‘Compliance conversation’ blog page, where we share the latest updates on safeguarding against scams and protecting your assets. Stay informed and stay protected!

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