First Mover Americas: Bitcoin Holds Below $75K Before Expected U.S. Rate Cut

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CoinDesk 20 Index: 2,238.35 +1.98%

Bitcoin BTC$88,853.98: $75,007.25 +0.43%

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Bitcoin traded around $75,000 during the European morning, about 2% lower than the all-time high of nearly $76,500 set Wednesday. Following Donald Trump's election victory, attention will turn to the next round of interest-rate cuts by the Fed, with analysts forecasting a 25 basis-point reduction later Thursday. While lower borrowing costs are generally seen as a bullish signal for risk assets such as crypto, this one might prove to be a non-event. The CME's FedWatch tool shows traders are assigning a nearly 100% chance of the Fed trimming the benchmark rate to 4.5%-4.7%, so the reduction is already priced in.

BTC's rally to an all-time high on Wednesday coincided with massive inflows into ETFs, which added a net $621.9 million, snapping a three-day streak of outflows. What was noteworthy was the strong inflows came despite market leader BlackRock's IBIT seeing net outflows of $69 million. Trading volume in the ETF was at a record level, according to Bloomberg analyst Eric Balchunas. "IBIT just had its biggest volume day ever with $4.1b traded," Balchunas wrote. "It was also up 10%, its second-best day since launching, some of this will convert into inflows". IBIT's outflows were offset by over $300 million of inflows for Fidelity's FBTC and over $100 million apiece for ARK 21Shares' ARKB, Bitwise's BITB and Grayscale's BTC.

Ether is over 7% higher in the last 24 hours, outperforming the broader digital asset market, which has risen by 2.7%, as measured by the CoinDesk 20 Index. ETH crossed $2,800 for the first time since early August, breaking out of the $2,300-$2,600 range that has persisted even while other coins were rallying. President-elect Trump's victory may be stirring hopes of a "DeFi Renaissance" and with it a breakout in the price of ether. “DeFi Renaissance thesis is progressing as expected with Trump deregulation and crypto friendly policy and rule-making from Republican admin and Senate,” wrote Arthur Cheong, co-founder at DeFiance Capital, in an X post.

Chart of the Day

• The chart shows short and long-term risk reversals (25rr) measuring the spread between pricing for call and put options.
• Risk reversals are positive, signaling a bias for calls or a bullish outlook.
• Short-duration risk reversals now exhibit a relatively stronger call bias, a sign of bullish euphoria that usually presages price corrections.
• Source: Amberdata

- Omkar Godbole

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