Cryptocurrency prices declined as markets weighed expectations for Federal Reserve policy changes ahead of the Jackson Hole event. Bitcoin fell roughly 1% over 24 hours and nearly 5% for the week to about $112,000, while Ethereum slipped about 2% to $4,240. Total crypto market capitalization dropped to about $3.9 trillion, and the S&P 500 eased 0.3% since markets opened Thursday. Traders are assessing whether the Fed will cut rates in September, which could shift funds from U.S. Treasury bills into higher-yielding risk assets like crypto. A recent rise in producer prices also contributed to the market pullback.
Crypto investors are holding their breaths before Jerome Powell, chair of the Federal Reserve, speaks Friday in Jackson Hole, Wyoming. Bitcoin has dipped about 1% over the past 24 hours and almost 5% over the past week to around $112,000, according to data from Binance. Ethereum, the world's second largest cryptocurrency, is also down 2% over the past day to now $4,240.
The pullback of the two largest cryptocurrencies tracks with a broader market decline, with the total market capitalization of all cryptocurrencies down 1% day-over-day to $3.9 trillion. Meanwhile, the S&P 500 is down 0.3% since markets opened Thursday.
"Investors appear increasingly doubtful that Powell will signal a pivot at Jackson Hole," James Butterfill, head of research at the crypto asset manager CoinShares, told Fortune.
But, two days later, the BLS reported that prices for goods made by U.S. producers increased 0.9% in July, the biggest uptick in what's called the producer price index since June 2022. The news led to a dip in crypto markets, which have traded lower over the past week.
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